Sony unit to purchase Zee Leisure, dominating Indian broadcast market

Punit Goenka, CEO and managing director of Zee Leisure Enterprises, attends a information convention earlier than the Zee Cine Awards in Macau January 21, 2012. REUTERS/Bobby Yip/File Photograph

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BENGALURU, Sept 22 (Reuters) – Sony’s (6758.T) India leisure unit will purchase native rival Zee (ZEE.NS), merging TV channels, movie belongings and streaming platforms to turn out to be the biggest broadcaster within the nation and higher compete with firms like Netflix and Disney.

The mixed entity, almost 53% owned by Sony Footage Networks India (SPNI), a unit of Japan’s Sony Group Corp, will personal widespread channels akin to Sony MAX and Zee TV and over-the-top platforms ZEE5 and SonyLIV, dominating the Indian TV and streaming market with over 50% market share, analysts stated.

The deal may also ease the stress that Zee Leisure Enterprises Ltd was dealing with from prime shareholders who known as for a administration reshuffle final week – together with the elimination of CEO Punit Goenka from the board – amid company governance considerations. learn extra

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SPNI will make investments $1.575 billion within the new entity, which will probably be publicly listed, the businesses stated in a press release, with out disclosing different monetary phrases.

Shares in Zee soared 35% after Wednesday’s announcement, taking its market capitalisation to just about $4.5 billion.

“This consolidation will create a constructive impression for the broadcasting trade since it should assist in boosting revenues of the present gamers which was bit subdued on account of over-the-top (platforms),” stated Vivek Menon, co-founder of debt fund NV Capital.

India’s broadcast trade was ripe for consolidation, particularly after the deal between Sony and Viacom 18 fell by way of, Menon stated, referring to scuppered merger plans between SPNI and a three way partnership owned by billionaire Mukesh Ambani’s Reliance Industries Ltd’s (RELI.NS) Network18 and ViacomCBS Inc (VIAC.O).

India, nonetheless heavy on direct-to-home TV leisure, has previously few years seen a surge of competitors from streaming platforms together with Netflix Inc (NFLX.O), Inc’s (AMZN.O) Prime Video and Walt Disney Co’s (DIS.N) Hotstar.

The mix of Zee and SPNI will create a mixed content material platform that may compete with home and international platforms and speed up the area’s transition to digital, Ravi Ahuja, chairman of world tv studios and Sony Footage Leisure company growth, stated in an inner memo seen by Reuters.

The 2 firms have signed an unique, non-binding time period sheet to mix their belongings, and can conduct due diligence and finalise definitive agreements in 90 days after which current the merger proposal to shareholders, they stated.

The vast majority of administrators of the merged entity will probably be named by Sony Group and Goenka will turn out to be the merged entity’s managing director and CEO.

A merger ought to enhance administration at Zee, stated Hetal Dalal, chief working officer at proxy advisory agency IiAS that had raised governance considerations. Dalal stated, nevertheless, that traders would want extra particulars in regards to the deal earlier than their considerations are quelled.

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Reporting by Rama Venkat, Chandini Monnappa and Vishwadha Chander in Bengaluru; Modifying by Arun Koyyur, Sayantani Ghosh and Tom Hogue

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