The Competition Commission of India (CCI) has cleared the way for India’s largest media merger involving Zee Entertainment Enterprises Limited (ZEEL) and Bangla Entertainment Private Limited (BEPL) with Culver Max Entertainment Private Limited (CME), a Sony Group Corporation indirect wholly owned subsidiary (SGC) that is a member of the SGC family (SGC Group).

The announcement came after CCI accepted proposed changes to the $10 billion deal announced by Zee and Sony last December, which sought to allay CCI’s concerns that the merger would give the Zee-Sony combined entity unprecedented pricing power over other TV channels in India’s entertainment and broadcasting industry.

In the CCI-approved modification to the transaction, Zee will exclude a significant general entertainment channel from the deal.

“The proposed combination relates to amalgamation of Zee Entertainment Enterprises Limited and Bangla Entertainment Private Limited (BEPL) with and into Culver Max Entertainment Private Limited, and preferential allotment of certain shares by CME to Sunbright International Holdings Limited (earlier known as Essel Holdings Limited), and Sunbright Mauritius Investments Limited. The proposed combination is in the nature of an acquisition and amalgamation falls under Section 5(a) and 5(c) of the Competition Act, 2002,” CCI said in a statement.

In India, CME operates a number of general entertainment channels (GEC), movie, sports, and kid-friendly channels. CME’s digital entertainment video service, SonyLIV, offers OTT services in markets outside of India. CME is accessible in 167 countries and has over 700 million viewers in India.

BEPL is also a wholly owned indirect subsidiary of SGC and a member of the SGC Group. BEPL is primarily involved in two activities: (i) acquiring rights to motion pictures, events, and other TV content; and (ii) generating advertising revenue from the broadcast of TV content.

According to a statement from SPN, the newly merged company will be officially launched after the final regulatory approvals. SPN said the combined company will offer extraordinary value to Indian customers and eventually take the lead in guiding them away from traditional pay TV and toward the digital future.
In a joint statement issued in December 2021, the two companies stated that the Japanese company would own 50.86% of the merged entity, while Zee Entertainment’s promoters would own 3.99%. The remaining 45.15% will be owned by Zee Entertainment’s public shareholders.

Punit Goenka, the son of Zee founder Subhash Chandra, will continue to serve as the combined company’s managing director and chief executive. Furthermore, Sony will pay non-compete fees to Zee promoters, which they will use to inject primary equity capital into SPN, allowing them to purchase shares of the company. The shares would eventually amount to approximately 2.11% of the total shares of the combined company.

Sony will nominate the majority of combined company directors, including current SPN managing director and CEO N.P. Singh.

According to media industry analysts, both companies complement each other. While Sony has a large selection of sports and mainstream general entertainment channels (GECs), Zee has a strong regional brand. Both have extensive film libraries. Furthermore, there is no significant overlap between the two companies, and no major flagship TV channel is expected to go off the air as a result of the merged entity.