Zee Entertainment Board Approves Merger With Sony India

Days after investor activism led to the exit of two directors of India’s largest publicly-traded television network, Zee Entertainment Enterprises Ltd. said it has agreed to merge with Sony Pictures Networks India Pvt.

Sony India will infuse growth capital and nominate majority of board members in the merged entity, according to an exchange filing. The capital infusion by Sony will be such that it will have a cash balance of about $1.575 billion (Rs 11,800 crore) at closing. Sony India shareholders will hold a majority 52.93% stake in the merged entity, while Zee shareholders will hold 47.07%.

Punit Goenka, the filing said, will continue to be the managing director and chief executive officer of the merged company.

Zee Entertainment on Sept. 13 had told the bourses that two institutional  investors, which hold 17.88% in the company, had requisitioned an extraordinary general meeting of shareholders to vote for removal of Punit Goenka, Manish Chokhani and Ashok Kurien as directors. In a separate filing, it said Kurien and Chokhani resigned with immediate effect. That had sent the shares of all Essel Group companies higher.