The deal is intended to combine the two companies’ linear TV networks, digital assets, production operations and programme libraries.
Upon the clearance of the deal by the National Company Law Tribunal, Zee’s shares experienced a 10% surge.
The combined entity is estimated to hold a value of approximately $10bn, as reported by Reuters.
Initially announced in 2021, the merger encountered challenges when the CEO of Zee, slated to lead the unified organisation, was barred by the Securities and Exchange Board of India from participating in the boards of publicly traded companies for a year.
According to Reuters’ report, subsequently, Zee established an interim committee, overseen by its board, to manage operations after the Chief Executive, Punit Goenka, failed to overturn the ban through an appeal process.
Following this favourable ruling, both companies are poised to commence the integration process in the early part of the upcoming week. ZEE has a 30-day window to file with the registrar of companies. Subsequently, the company’s shares will be delisted from stock exchanges, with the merged enterprise expected to be relisted in approximately six weeks.
The objective of this merger is to unify the linear TV networks, digital resources, production activities, and program libraries of both entities.
Per the strategy outlined in September 2021 and finalised by December 2021, the merged company will retain Zee’s listing on the Indian stock market. However, Sony will inject a substantial amount of capital and hold a controlling majority stake of nearly 51%.
In July, the NCLT had temporarily held back the merger order due to objections raised by creditors owed around $152m, including Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship. These objections were dismissed by the NCLT on August 10.