Sony Pictures Networks India said on Wednesday it has agreed to acquire Zee Entertainment, which if the deal materializes, will bring together two of the largest broadcasting giants that run large cable television networks, streaming services, music labels, and own scores of other digital assets.
The subsidiary of the Japanese conglomerate said it will invest $1.575 billion in Zee Entertainment, a 20-year-old firm that has been battling with internal governance issues.
Sony, which disclosed it wants to acquire controlling 53% stake in the publicly listed Zee Enterprises, did not say how much it plans to spend on buying the firm, which operates dozens of TV channels in English, Hindi, and many regional languages and has tie-ups with several global studios for broadcasting and streaming their library in India. Sony Pictures Networks India, similarly, operates over a dozen TV channels in India.
The firms also operate on-demand streaming services such as Zee5 and SonyLiv that compete with dozens of other players including Netflix, Amazon Prime Video, and Disney’s Hotstar.
The two firms said on Wednesday that over the next 90 days they will conduct due diligence and finalize a definitive agreement. Analysts say that Zee will need majority approval from its shareholders for the deal to work.
In a regulatory filing, Zee Entertainment said the proposed merged entity will be led by current Zee chief executive Punit Goenka (pictured above). Several Zee shareholders have asked for the termination of Goenka and other top officials in recent days.
Zee’s shares surged 35% on the news Wednesday, giving it a market value of $4.5 billion.