New Delhi, Jul 29: Zee Entertainment on Friday said it has received approval from stock exchanges BSE and NSE for its proposed merger with Sony Pictures Networks India. The proposed merger with Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India) has been approved by Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), said a statement from Zee Entertainment Enterprises Ltd (ZEEL) “The approval from the stock exchanges marks a firm and positive step in the overall merger approval process,” it said.

The approvals permit ZEEL to proceed with the next steps in the overall merger process, it added. However, the composite scheme of arrangement remains subject to applicable regulatory and other approvals, the statement said.

Last year in December, the two media companies had signed definitive agreements for the merger of ZEEL into SPNI following conclusion of an exclusive negotiation period during which both parties conducted mutual due diligence. When the merger deal was announced in September, the two networks had stated that Sony would invest USD 1.575 billion and hold a 52.93 per cent stake in the merged entity and Zee the remaining 47.07 per cent.

Under the terms of the definitive agreements, the statement had said SPNI will have a cash balance of USD 1.5 billion at closing, including through infusion by the current shareholders of SPNI and the promoter founders of ZEEL. After closing, the new combined company will be publicly listed in India.

The closing of the transaction is subject to certain customary closing conditions, including regulatory, shareholder, and third-party approvals, the statement said. As part of the agreement, Sony Pictures Entertainment Inc will pay a non-compete fee to certain promoter founders of ZEEL, which will be used by them to infuse primary equity capital into SPNI. This would entitle them to acquire shares of SPNI, which would eventually equal approximately 2.11 per cent of the shares of the combined company on a post-closing basis.

ZEEL’s chief executive Punit Goenka will lead the combined company as its Managing Director & CEO. The majority of the board of directors of the combined entity will be nominated by the Sony Group.

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