Zee Entertainment Enterprises Shares Rises 6% After Merger Approval

Competition Commission of India approves the merger of Zee Entertainment Enterprises (ZEEL) including some others with Sony Pictures Networks (SPN).

Thursday’s intraday trading saw a 6% increase in Zee Entertainment Enterprises (ZEEL) share price to Rs 283.75 following the Competition Commission of India’s (CCI) conditional clearance of the company’s intended merger with Sony Pictures Networks (SPN) India.

The merger of Zee Entertainment Enterprises Limited, Bangla Entertainment Private Limited (BEPL) along with Culver Max Entertainment Private Limited (CMEPL), formerly known as Sony Pictures Networks India Private Limited, has been given the go-ahead by the Competition Commission of India (CCI), according to a filing with the stock exchange by ZEEL.

The ZEEL stock increased 13% during the course of the last week, while the S&P BSE Sensex rose only 3.5%. In the last three months, the stock increased 26% as opposed to the benchmark index’s 9% growth. 

However, it underperformed the market during the past six months, declining 5% as opposed to the Sensex’s 2% loss.

The National Company Law Tribunal had requested last month that Zee call a shareholder meeting on October 14 to seek permission for the proposed merger.

The leading entertainment networks in Hindi are Zee TV and Sony Entertainment Television. According to research, the two actors have a collective viewership share of 36% in Hindi general entertainment.

SPN said that they are overjoyed to have the CCI approve the merger of ZEEL and SPN. Now that the last governmental permissions are needed, they can finally launch the newly amalgamated business.

According to Sony Pictures Networks India, the combined company will offer tremendous value to Indian customers and eventually help them switch from traditional pay TV to the digital future.

Analysts predict that the merger will be completed by Q4 of the current fiscal year as a result of the permission.

However, according to experts at Sharekhan, the planned merger would be a good fit from a revenue viewpoint and would enable the combined company to become a dominant force in the entertainment sector.

“The combined company’s expansion funding would be allocated to premium content, including sports activity rights, strengthening its position in the OTT market.”

The brokerage firm continued, “We anticipate the company to produce a 14% CAGR in adjusted net profit over FY2022-FY2024E.”