Zee Entertainment on Friday said it has received approval from the BSE and NSE for its proposed merger with Sony Pictures Networks India.
The proposed merger with Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India) has been approved by the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), according to a statement by Zee Entertainment Enterprises Ltd (ZEEL).
“The approval from the exchanges is a solid and positive step in the overall merger approval process,” it said.
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The approvals allow ZEEL to proceed with the next steps in the overall merger process, he added.
However, the composite scheme of arrangement remains subject to applicable regulatory and other approvals, the statement said.
Last December, the two media companies signed definitive agreements for the merger of ZEEL into SPNI after the conclusion of an exclusive negotiation period during which both parties conducted due diligence on each other.
When the merger deal was announced in September, the two networks said Sony would invest $1.575 billion and hold a 52.93 percent stake in the merged entity, with Zee the remaining 47.07 percent.
Under the terms of the definitive agreements, the statement said that SPNI will have a cash balance of $1.5 billion at closing, including through an infusion by SPNI’s current shareholders and promoter founders of ZEEL.
Upon closing, the new combined company will be publicly listed in India.
Closing of the transaction is subject to certain customary closing conditions, including regulatory, shareholder and third-party approvals, the statement said.
As part of the agreement, Sony Pictures Entertainment Inc will pay certain founders of ZEEL a non-compete fee, which they will use to inject primary equity capital into SPNI. This would entitle them to acquire SPNI shares, which would ultimately equate to approximately 2.11 percent of the combined company’s shares on a post-closing basis.
ZEEL CEO Punit Goenka will lead the merged company as its Managing Director and CEO. The majority of the combined entity’s board will be nominated by the Sony Group.