Zee Entertainment has signed a merger deal with Sony Pictures Networks India Private Limited, the company said in an exchange filing on Wednesday.

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"The Board of Directors of ZEEL at its meeting held on September 22, 2021, has approved the execution of a non-binding term sheet ("Termsheet") with Sony Pictures Networks India Private Limited ("Sony India"), in relation to a potential transaction involving a composite scheme of arrangement for the merger of the Company and Sony India and infusion of growth capital by the promoters of Sony India into Sony India as part of the merger," ZEE said.

Puneet Goenka will continue to provide services to the merged company as MD and CEO for a period of 5 years, the company said.

After the deal, promoters of Sony will have the right to appoint the majority of directors to the merged company.

Zee Entertainment will hold 47.07 percent, while Sony India will hold a 52.93 percent stake in the merged company. Both the companies have agreed to a binding exclusivity for 90 days.

According to the term sheet, the promoter family is free to increase its shareholding from the current 4 percent to up to 20 percent, the company said.

Last week, Zee Entertainment saw shareholder activism that witnessed an open call for the ouster of promoters and the incumbent management led by Goenka.

Meanwhile, Zee Entertainment Enterprises had said in its 39th annual general meeting (AGM) that all the resolutions were passed with the requisite majority. This development came after the largest shareholders Invesco Developing Markets Fund and OFI Global China Fund LLC sought a special meeting of shareholders to remove CEO and Managing Director Punit Goenka.

(Edited by : Anshul)

First Published:Sept 22, 2021 8:15 AM IST