What’s Going On Inside The Zee And Sony Merger

Zee and Sony merger

From 2021, you might have heard numerous news about the merger between Zee Entertainment and Sony Pictures Networks India. In October 2022, the CCI approved the merger of Zee Entertainment with Sony Pictures.  It created one of the largest companies in India, with a large portfolio of television channels, digital platforms, and content production capabilities.

Zee will have a stake of 61.25% as per the valuation ratios once the deal goes through. But the final results were different! Also, they are facing multiple challenges ever since they announced the merger. In this article, you will get to know what is going on inside the Zee and Sony merger

Zee & Sony Merger

A Brief Overview

The whole scenario began in September 2021, when Zee accepted a non-binding term sheet with Sony to consolidate their business. What was the need for this merger? You may ask. Well, the chief reason was capital and expansion plans. Despite being the top media channel in India, Zee entertainment was severely struggling for cash to execute its expansion plans.

On the other hand, Sony Pictures, a subsidiary of a Japanese MNC had enough capital but lacked its presence in the regional Hindi GEC (General Entertainment Channel) market. Therefore, both companies were highly anticipated for amalgamation. Eventually, it was a strategic coalition in broadcast, digital, and entertainment content.

Characteristic features of Zee (ZEEL) and Sony (SPNI).

S. No.Characteristic Features Zee (ZEEL)Sony (SPNI)
1.GenreAll Genre (Fictional and Non-fictional)Non-fictional Genre
2.Network Viewing Share17%12%
3.Strong Presence Regional Channels Sports and GEC (General Entertainment Channels)
4.No. of channels on each network4531
5.Annual Revenues (FY 2021)INR 7,730 croreINR 5,846 crore

Progress on the merger deal

Majority Partner

The vision for the Zee-Sony merger was to gain greater access to cash flows, capital, and expansion in multiple entertainment segments of India. After the merging process, Sony Pictures owned 52.93% shares whereas Zee Entertainment owned only 47.07% of the share.

Wait. Wasn’t it decided that Zee would own 61.25% shares of the combined entity? Yes, but in every venture combination, both parties are required to provide the cash. For this joint venture, Sony Pictures provided most of the cash. With Sony’s capital contribution, the merged entity has a total sum of $1.5 billion. That’s why Sony Pictures became the majority partner in this merger deal.


Since both parties are publicly listed companies, the combination will consolidate the market share. Therefore, they needed approval from various entities. It included stock exchanges, shareholders, SEBI, the Ministry of Information and Broadcasting, and the Competition Commission of India (CCI). 

Non-Binding Term Sheet

As per the non-binding term sheet, both Zee and Sony combined various assets and operations. Such as-

  • Linear Networks
  • Digital Assets
  • Production Operations
  • Program Libraries

Both parties completed the process of due diligence of each other through data rooms within 90 days. As per this term sheet, Punit Goenka will continue to be the managing director and CEO of the amalgamated entity for the coming five years.


The Zee and Sony merger created a new entertainment powerhouse in India worth INR 15,000 crore.  The former holds the expertise in content creation, exclusive regional bouquet, and deep consumer connection from the last 30 years.

While the latter is a successful entertainment channel in gaming and sports segments. Both of them provide strategic advantages to each other. Now, the combined entity owns-

  • 75 Television Channels
  • 2 Video Streaming Services- ZEE 5 and Sony LIV
  • 2 Film Studios- Zee Studios and Sony Pictures Films India
  • 1 Digital Content Studio- Studio NXT
  • Revenue- over INR 13,600 crore
  • Number of Employees- Over 4000 employees

Thus, the merger will create a combined content platform with the strongest leadership teams, content creators, high-quality series, and film libraries. It can successfully compete with other global channels too.

Challenges for the Zee-Sony merger

Even though the merger seems to be quite beneficial, both parties confront multiple challenges. Some of them are-

Trust issues within the entity

The biggest challenge is the selection of the head and board of directors of the merged entity for the next five years. Therefore, it creates a tense relationship between the institutional owners of ZEE and Sony. Although Invesco (one of the owners of ZEEL) requested an emergency general meeting to remove Goenka (former CEO of ZEEL). But later on, the entity’s board of Directors approved the position of Goenka as the CEO of the merged entity for the next five years.

Notice issued against the merger

CCI (India’s anti-trust regulator) issued a notice against the merger between Zee and Sony. Because the merged entity would enjoy a “humongous” or “monopolized” position in the Indian market with 92 television channels, $86 billion in revenue, and assets worth $211 billion. This could drastically hurt the competition because of their dominant bargaining power. Although the legal team of Zee had stated that they are taking all the required legal steps for the completion of the merging process. Despite their explanations, Zee’s share fell by around 5%. They tried hard to settle down the cases by stating that they received approval from 99.97% of shareholders, creditors, SEBI, stock exchanges, and CCI.

NCLT case against Zee-Sony Merger

Recently, the NCLT adjourned the applications filed to oppose the merger to March 9, 2023. The lenders and creditors of Zee filed the petition. They included IndusInd Bank, Axis Finance Ltd, IDBI Bank, and the Indian Performing Rights Society (IPRS). They filed cases and insolvency applications against Zee regarding the alleged default of 89-249 crores. The counsels of the merger claimed that certain lenders and creditors are playing cunning tactics to delay the merger completion process. This resulted in a sudden drop in stocks of ZEE entertainment shares. Unlike any other monopoly stocks, the large merger entity (Zee and Sony) is prone to the volatility of share drops.


The merged entity is enjoying a “Humongous” market position in India. The Zee and Sony merger is a classic amalgamation case that attracted large advertising revenue from streaming services and other television broadcasting channels.  This merged entity created a strong consumer appeal across all genres and regional languages. Even though the process is yet to be completed due to some legal processes. But we will soon update the proceedings related to Zee and Sony merger.

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Published By: Supti Nandi
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