CCI Approves Zee-Sony Merger With Modifications

The Competition Commission of India has given a conditional approval to the proposed merger of Zee Entertainment and Sony Group's Indian unit.

The anti-trust authority said that the approval has been given subject to "certain modifications".

Specifically, the transaction involves amalgamation of Zee Entertainment Enterprises Ltd. and Sony Group's Bangla Entertainment Pvt. with Culver Max Entertainment Pvt.—an indirect wholly owned subsidiary of Sony Group Corp.

The parties had sought CCI's approval for:

• Amalgamation of each of ZEE and BEPL with and into CME.

• Preferential allotment of certain shares by CME to Sunbright International Holdings Ltd. (earlier known as Essel Holdings Ltd.), and Sunbright Mauritius Investments Ltd.

The regulator has approved the proposed combination subject to the parties carrying out modifications.

According to Zee Entertainment's disclosures and BQ Prime's calculations, Sony will initially get 52.93% stake in the merged company.

The Zee promoter stake will fall to 1.8% after the merger. Sony India promoters will then transfer shares to Zee Entertainment promoters as consideration for a non-compete agreement.

The transfer will help Zee promoters shore up their holding to the current 3.99%.

Currently, Essel Group owns exactly as much in Zee Entertainment. The rest is held by public shareholders, led by foreign portfolio investors (39.18%), mutual funds (21.42%), and insurance companies (8.80%).

The proposed merger has already received approval from the stock exchanges, BSE and NSE.

Zee Entertainment said in a statement that "considering the immense value which the proposed merger will generate for all its stakeholders, it has offered the necessary remedies in accordance with the regulator's guidelines".

Sony Pictures Networks India said in an emailed statement: “We are delighted to receive CCI approvals to merge ZEEL into SPN. We will now await remaining regulatory approvals to finally launch the new merged company."