Indian broadcaster Zee Entertainment and a unit of Sony Pictures on Dec. 22 announced an agreement to merge valuing the enlarged business at roughly $7 billion.
Sony Pictures is infusing $1.1 billion of cash in exchange for an additional 15% equity stake on top of the value of Sony Pictures Networks India. As a result, Sony Pictures will indirectly hold a majority 50.9% of the combined company. Zee’s founders have agreed to cap their future stake in the enlarged business to no more than 20%, up from their post-deal stake of 3.99%. The family will not have any pre-emptive or preferential right to increase their future stake, per the deal terms. Zee boss Punit Goenka will be managing director and chief executive of the combined company and will report to a board of Sony-dominated nominees.