The deal, announced a year ago, received the Competition Commission of India’s nod after the regulator accepted ‘voluntary remedies’ proposed by the parties. The watchdog said it has cleared the deal with some modifications.
CCI said it has approved the amalgamation of
(ZEEL) and Bangla Entertainment (BEPL) with Culver Max Entertainment (CME), with certain modifications.
The deal remains subject to applicable regulatory and other approvals, ZEEL said. In a separate statement, Sony Pictures Networks India said it is delighted to receive CCI approval for the merger.
Following the development, shares of Zee Entertainment surged more than 6 per cent to Rs 283.75, before paring some gains to trade at Rs 277.40 at 9.45 am. The scrip had settled at Rs 267.50 on Tuesday.
Market analysts remain positive on Zee Entertainment after the approval, anticipating that no major flagship channel would be shut after the merger due to the content overlap.
We believe the parties may offer to shut channels but overall revenue impact could be minimal as these channels may be based on a push demand and not pull demand by customers, said Karan Taurani from Elara Capital. He maintained a positive stance on Zee.
Street analysts are expecting the final CCI order to follow in the next three weeks, which will provide more clarity on the same. Shareholders are scheduled to meet on October 14 for approval.
The process may take another quarter and one can see the merged entity by the beginning of FY25, if all approvals fall within the given timeline, said experts.
Pankaj Pandey, Head Research, ICICIDirect said, “We still do not know the finer details in terms of whether there will be a drop in some kind of GEC channels and regional channels but we have a buy rating on the stock.”
Global brokerage firm CLSA is also positive on the media major and believes that CCI approval for Zee and Sony merger is a big positive and will be the rerating catalyst for the stock.
Sony, when merged with Zee, will list in India, holding a majority 51 per cent stake in the new entity and a cash of $1.5 billion. “Zee stock valuations are compelling and we recommend a buy with a target price of Rs 316,” it said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
