The board of directors of entertainment major Zee Entertainment Enterprises Limited (ZEEL), on Wednesday, has approved the binding agreement with Sony Pictures Networks India (SPNI), a subsidiary of Sony Pictures Entertainment. The approval comes a day after the 90-day exclusivity period of the non-binding bid ended yesterday.

Share Market Live

NSE

Punit Goenka will lead the merged entity as the managing director and CEO of the company. The majority of the board of directors of the combined company will be nominated by the Sony Group and will include the current SPN Managing Director and CEO NP Singh. Singh will also assume a broader executive position at SPE as the Chairman of Sony Pictures India (a division of SPE). Singh will report to Ravi Ahuja, the chairman of Global Television Studios and SPE corporate.

In an interview to CNBC-TV18, Hetal Dalal, president and COO of Institutional Investor Advisory Services, Shashi Sinha, chairman of Media Research Users Council India, and S Raghunath, Professor at IIM Bangalore, discussed the deal at length.

Also Read: Zee shares gain over 2% after board approves merger with Sony

First up, Dalal said, “We will have to see how Invesco (largest minority shareholder in Zee) reacts to this. It’s not a perfect deal. Will they be able to handle the pieces that they do not like is the question.”

Meanwhile, Raghunath said, “This is a welcome move. For a very long time, Zee has struggled on the technology front. So, if the synergies come in with Sony’s board members having a majority in the newly formed entity's board, the decision of integrating technology with entertainment will get a quantum leap and hopefully, the synergies will create a better entertainment market in our own country and consumption will go up. Therefore, in terms of consumption, market space growth, this is a welcome move.”

Also Read: Zee-Sony merger: Agreement goes through, Punit Goenka to lead merged entity

According to Sinha, “This is an industry which requires a huge investment and perhaps is the most fragmented industry in the world. So consolidation is good and it’s good news all-round.”

For the entire discussion, watch the video