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21 November, 2024 17:59 IST |
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ZEE, Sony merger-Turning into a dominant media player
Source: IRIS | 23 Dec, 2021, 12.32PM
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| Rating: NAN / 5 stars. |
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 Zee Entertainment Enterprises, one of the largest Indian media and entertainment companies, announced completion of the due diligence and final contours of the deal. SONY and ZEE's promoters will hold 51%/4% in the merged entity, while the rest will be held by the public.
There will be a fresh capital infusion of Rs 113 billion (USD 1.6 billion) by Sony, including the Rs 11 billion as non-compete fee to ZEE's promoters, which will be utilized to increase its stake to 4% from 2% in the merged entity.
"The merged entity is valued ~17x FY20 EV/EBITDA and 22x P/E. On a SoTP basis, the merged entity's linear business is estimated to be valued at 11-12x EV/EBITDA, with a negative value for the OTT business," stated Motilal Oswal Institutional Equities.
"The combined entity will be a leader in the broadcasting space, with a strong war chest for intensifying its OTT foray and an investment similar to that made by Netflix on its India content. A strategic partner like Sony will create ability to leverage largescale opportunities in the Indian media space. Subsequently, we upgrade to Buy from Neutral with revise TP of Rs 425. Roadblocks in deal fruition could be a key risk," it added.
Disclaimer: IRIS has taken due care and caution in compilation of data for its website. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.
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