Zee Entertainment has signed a deal to merge with Sony Pictures Networks India Private Limited, according to an exchange filing. Sony Pictures Entertainment would invest USD 1.575 billion in the merged entity, according to the agreement.

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Following the merger, Zee Entertainment stockholders would own 47.07 percent of the merged business, while Sony Pictures Networks will own 52.93 percent. Punit Goenka will be the amalgamated firm’s MD and CEO for the next five years, according to the company. Sony Group will have the power to appoint majority directors to the combined entity’s board of directors.

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ZEE and SPN have signed a non-binding term sheet to combine their linear networks, digital assets, production operations, and content libraries, with the ZEE board authorizing management to initiate the requisite due diligence procedure.

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The merged business would own 75 TV stations, two video streaming services (ZEE5 and Sony LIV), two film studios (Zee Studios and Sony Pictures Films India), and a digital content studio (Studio NXT), making it the country’s largest entertainment network, larger than Star and Disney India combined.

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According to the most recent financial information, they would also have over Rs 16,000 crore in revenue and over 4,000 employees. However, there will be a lot of overlap, which may necessitate resource rationalization and the integration of a few TV stations.

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Meanwhile, as part of the transaction, the two firms’ promoters will sign specific non-compete agreements. According to the term sheet, the ZEE promoter family is allowed to expand its shareholding from 3.99 percent to up to 20 percent in line with applicable legislation.

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The final transaction is subject to the completion of routine due diligence and the implementation of definitive agreements, as well as the requisite corporate, regulatory, and third-party approvals, including ZEE’s shareholder votes.