Zee Sony Merger : The Deal to Crack the code of Indian Market

The details of the merger between Zee Entertainment and Sony Pictures Networks. A non-binding partnership agreement has been signed by the two businesses to unite their respective linear networks, digital assets, production processes, and programme catalogues.

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Zee Sony Merger : The Deal to Crack the code of Indian Market

The merger of Zee Entertainment Enterprises Ltd. and Sony Pictures Networks India has received preliminary approval from the board of directors of ZEEL. This merger could result in a media conglomerate that spans a variety of platforms, including cable television, online video streaming, production businesses, and music and video libraries.

The Terms of the Agreement between Zee & Sony

A non-binding partnership agreement has been signed by the two businesses to unite their respective linear networks, digital assets, production processes, and programme libraries. The term sheet stipulates a 90-day exclusive window for ZEEL and Sony Pictures Networks India to perform due diligence on one another and finalise formal agreements. The combined business will be listed on the Indian stock exchange. Along with the merger, Sony shareholders will also invest $1.575 billion in the new firm. As a result, Sony shareholders would own 52.93 percent of the combined company, while ZEEL owners will own 47.07 percent.

Presently, public shareholders own 96.01 percent of ZEE’s shares, while promoters own 3.99 percent. How does the agreement help ZEE? Whereas ZEE has a higher network viewing share than Sony, Sony has a better presence in Hindi GEC and sports, while ZEE gets the majority of its strength from regional general entertainment networks (GEC) and movies. In truth, Zee Entertainment sold Sony Pictures Networks India its sports content under the Ten Sports brand in 2018 along with a non-compete clause preventing Zee from joining the sports market.

Additionally, experts claim that a merger like this might assist ZEE allay some of the recent worries voiced by significant shareholders regarding corporate governance difficulties with a multinational corporation like Sony joining.

Reason for the Zee & Sony Merger

In order to compete with the Disney-Star partnership, which has been dominating the content industry, Sony Pictures Networks had been searching for a local partner in India. The business had also been in merger talks with Viacom, which is controlled by Reliance, but those conversations broke up last year because the two parties couldn’t come to terms on issues like value and other merger-related factors. Sony may also see some of the holes being filled with the ZEEL cooperation, especially in its lineup of entertainment channels, which has mostly relied on seasonal programmes like Kaun Banega Crorepati for its popularity.

Sony Pictures Networks India reaches out to an average of 700 million viewers in India and is available in 167 countries, whereas ZEEL is present across broadcasting, movies, music, digital, live entertainment, and theater businesses, both in India and abroad. ZEEL has more than 260,000 hours of television content and houses the broadest Hindi film catalogue in the world with rights to more than 4,800 movies and shows across various languages.

Planning for OTT for Zee & Sony Merger

With Sony and Zee joining together, the OTT market, which is now dominated by American behemoths like Netflix, Amazon Prime, and Disney+Hotstar, may experience growing competitive market. According to a research published earlier this year by independent transaction consulting company RBSA Advisors, Netflix and Amazon Prime Video each hold a 20% market share, followed by Disney+Hotstar at 17%, ZEE5 at 9%, SonyLIV at 4%, and ALTBalaji at 3%.

The combined market share of these platforms may be in the running for third place in the Indian OTT market, while the specifics of the merger, such as whether SonyLIV and ZEE5 would operate as one brand or independently, are still to be determined. In particular, Sony’s entertainment channel lineup, which has mostly relied on seasonal programmes like Kaun Banega Crorepati for its popularity, might see some of the holes being filled with the ZEE alliance.

Also Read, Sony trims profit forecast after games business falters

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