Zee Entertainment - Synergy From Sony India Merger To Drive Re-Rating: Prabhudas Lilladher
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Prabhudas Lilladher Report
Zee Entertainment Enterprises Ltd.’s proposed merger with Sony Pictures Networks India is a win-win situation, as it will likely-
result in material revenue synergies (~6-10% due to better scale and reach)
drive growth, as merged entity will have cash ammunition of $1.7 billion to fund digital ambitions and
absolve uncertainty surrounding board room decision risks.
Post-merger, network will have a market share of ~28%, thereby creating an all-encompassing portfolio present across genres.
While Mr Punit Goenka is expected to continue as Managing Director and Chief Executive Officer for a period of five years, newly constituted board will have Sony’s dominance with Zee Entertainment’s promoter family getting only one board seat.
The deal will require approval of Competition Commission of India, Securities and Exchange Board of India and existing shareholders (75% votes have to be in favor).
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