‘Zee-Sony deal brought two rivals together’

What are the next steps required in terms of shareholder and regulatory approvals?

goenka: The first and foremost thing for us is that both the companies will jointly file this merger application with CCI, and ZEEL will file its application with SEBI and stock exchanges for their approval. After the approval of the CCI and the approval of the exchange, we will move to the NCLT process of merger. And only then the shareholder vote will be sought by the NCLT. The entire process takes from eight to 12 months. And that is our hypothesis that we should be within that time frame to achieve it.

Can you conduct the merger before that?

goenka: We will have to wait for the merger to be approved before operating together. We will have to wait for at least the CCI approval to start discussing the next steps and what we plan to do.

So you can’t jointly bid for IPL rights in January? There was talk that now that the money is being made available, the combined entity can make a competitive bid for the IPL.

goenka: No we can not. This is not allowed. The money being poured into the company is not only growth capital for one asset, but for the larger business as a whole, whether on the sports side, or the digital side, and there could potentially be other new verticals that could be The combined company may choose to do so.

Mr. Goenka, does this sound like a victory for Pyrik to you? You will be running the firm as MD but now there will be little influence on the board.

goenka: The fact that we did not have control over the board even before this merger. It is largely a board-run company. We have six independent directors, and I am the only executive director on the board today. And so, it doesn’t change much from that point of view.

But of course, what it does is that it brings together two very formidable competitors, potentially creating a real media powerhouse from emerging markets that can really challenge and not just the existing players in the market, Rather, it can also challenge potential global players. Would love to enter this country. It is a victory from my point of view that I have to lead this combined entity for the foreseeable future, at least for five years. It is a win-win deal for Sony, Zee and my family. It also gives Sony comfort that we are going to be in a non-competitive position with the merged company for five years. This gives a clear runway to make this country truly a powerhouse in the media-entertainment sector, which is the fastest growing market across the globe.

But isn’t it different now that there will be another media company under the control of the board?

goenka: I will ask Ravi (Ahuja) to come forward and answer this.

Ahuja: Our view as majority shareholder, with the majority of the board nominated by us, Puneet is running the company, as NP (Singh) wholly runs the SPNI in India despite being a full shareholder in Los Angeles.

This is the only way to have complete commercial and operational control at the local level in India. We can never second guess and try to micromanage and operate business remotely. I think a lot is going to feel in this regard for Puneet as it used to be.

Lion: With many years of our own experience, we’ve run this company very successfully, very independently with strategic guidance and direction coming from SPE in LA. Then from Sun. So in the same way, we will look forward to Puneet running the company going forward.

Is there any sense in the appointment of Puneet Goenka as MD and CEO that he will not be removed for at least five years? Is it guaranteed?

Ahuja: We are of the view that Puneet will be the CEO for five years. Nothing in life is guaranteed in that sense, you know, but Puneet is the CEO for a five-year job.

Once approved, what will the merged entity in India be called?

goenka: We are not at that stage yet. We haven’t reached any conclusion as to what the new entity will be called. But I can take the liberty to say that both the companies are formidable and strong brands.

We will take the best of both worlds and serve the consumer and our partners to create shareholder value.

Essentially, there must be a brand hierarchy. Will Sony brand prevail or Zee brand will prevail?

goenka: There’s no easy answer.

Ahuja: The fact that we are all staring blankly at each other means we haven’t figured it out yet.

Can you give us the new unit size in terms of revenue? Will this market leader be bigger than Disney?

goenka: In terms of top line, we’d be in the same ballpark as them, which is about $2 billion. But in terms of profitability, we will be much higher than our competitors.

Will you get the required 75% votes to approve the deal? Also, will you be reaching out to Invesco to get them on board, or are you already?

goenka: Given the fact that we just signed last night (Tuesday), we haven’t reached out to Invesco yet. I don’t think we intend to contact Invesco immediately. But at 75% of the vote, I am confident that shareholders will see the merit of this transaction for Zee. This puts this company in a formidable position to truly become a media powerhouse and the value that it creates for them in the long run. So, I believe we should be able to get votes in favor of the merger.

Has Sony reached out to Invesco in the interest of looking into the deal? Will you adopt some kind of soft diplomacy?

Ahuja: We haven’t done that. Again, we haven’t thought about that.

How worried are you that this deal could stumble into the shareholder approval stage?

AhujaThere is tremendous value in the combination of these two companies. You see this in the performance of the stock price as it is announced, in the reaction in the press, and in the reaction of people who know about the market. So I believe shareholders will see the value as well.

Sony has given 2% shares in lieu of non-compete clause. What Businesses Are Off-Limits for the Family?

goenka: Any business incorporated in the merged company is covered under non-compete to family, and here family is defined as the Essel Group, owned and controlled by Dr. Subhash Chandra, me and my brothers And our families have. And non-compete is for five years.

Do you think selling the additional stake to Invesco was a mistake?

goenka: Everything looks like a mistake. But at that time it was the right decision. I usually don’t like to talk about what happened in the past. The past is in the past, and we look forward to the future. I believe only the future is going to be bright here.

How relieved is Sony that it has been able to execute the deal, not Viacom?

Ahuja: The word relief is probably not the word I would use; We are very happy and excited about the future, and I think we will be able to truly fulfill the leadership dream. So, I completely agree with that. Relief means we thought we had a problem. SPNI is a great company; What NP has built there, they’re growing a lot, it’s highly profitable, and we’re very happy with the business, but it allows us to take the lead.

Are you going to bid for IPL media rights?

goenka: We will definitely evaluate the IPL opportunity. As you know, Zee will have to consider this on a standalone basis as we cannot work together. And you also know the fact that we’re very, very valuable when it comes to any bidding like this, but we’ll definitely consider participating in that.

Lion: We will evaluate seriously. We were the ones who made the first bet on IPL and ran it successfully for 10 years, and made it into what it is today.