SONY PICTURES NETWORKS INDIA AND ZEE ENTERTAINMENT ENTERPRISES LTD. SIGN DEFINITIVE AGREEMENTS TO MERGE

Combined Company to Deliver Premium Content with a Robust Consumer Experience across Platforms
Synergies between SPNI & ZEEL to enhance the Combined Company’s Content Creation Capabilities and Drive Digital Platform Growth

[Mumbai – December 22, 2021]

Sony Pictures Networks India Private Limited (SPNI) and Zee Entertainment Enterprises Ltd. (ZEEL) today announced that they have signed definitive agreements to merge ZEEL with and into SPNI and combine their linear networks, digital assets,production operations and program libraries. The agreements follow the conclusion of a nexclusive negotiation period during which ZEEL and SPNI conducted mutual due diligence. After closing, the new combined company will be publicly listed in India. The closing of the transactionis subject to certain customary closing conditions, including regulatory, shareholder, and third-party approvals.

Under the terms of the definitive agreements, SPNI will have cash balance of USD $1.5 Bn(assuming an INR:USD exchange rate of 75:1) at closing, including through infusion by the current shareholders of SPNI and the promoters (founders) of ZEEL, to enable the combined company to drive sharper content creation across platforms, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fast-growing sports landscape and pursue other growth opportunities.

SPNI is an indirect subsidiary of Sony Pictures Entertainment Inc. (SPE). Under the transactions contemplated by a non-compete agreement, SPE, through a subsidiary, will pay a non-compete fee to certain promoters (founders) of ZEEL, which will be used by such promoters (founders) to infuse primary equity capital into SPNI, entitling the promoters (founders) of ZEEL to acquire shares of SPNI, which would eventually equal approximately 2.11% of the shares of the combined company on a post-closing basis.

After the closing, SPE will indirectly hold a majority 50.86% ofthe combined company, the promoters (founders) of ZEEL will hold 3.99%, and the other ZEEL shareholders will hold a 45.15% stake

Mr. Punit Goenka will lead the combined company as its Managing Director & CEO. The majorityof the board of directors of the combined company will be nominated by the Sony Group and willinclude the current SPNI Managing Director and CEO, Mr. N.P. Singh. On closing, Mr. Singh will assume a broader executive position at SPE as Chairman, Sony Pictures India (a division of SPE)reporting to Mr. Ravi Ahuja, SPE’s Chairman of Global Television Studios and SPE Corporate Development.

The combination of ZEEL and SPNI is expected to achieve business synergies and given their relative strengths in scripted, factual and sports programming, respective distribution footprints across India and iconic entertainment brands, the combined company should be well-positioned to meet the growing consumer demand for premium content across entertainment touchpoints and platforms.

The seamless blend of rich expertise in content creation, deep consumer insights and success across entertainment genres is expected to drive the combined company’s ability to accrue higher shareholder value. Under the stewardship of the Sony Group, a global leader in consumer technologies, gaming and entertainment, the combined company is expected to be able to better compete with the world’s largest streaming players

As part of the definitive agreements, the promoters (founders) of ZEEL have agreed to limit the equity that they may own in the combined company to 20% of its outstanding shares. This construct does not provide the promoters (founders) of ZEEL any pre-emptive or other rights to acquire equity of the combined company from the Sony Group, the combined company or any other party. Any shares purchased by the promoters (founders) of ZEEL, must be in compliance with all applicable laws including any pricing guidelines.

Commenting on this development, Mr. Punit Goenka, MD & CEO, ZEE Entertainment Enterprises Ltd. said, “It is a significant milestone for all of us, as two leading media & entertainment companies join hands to drive the next era of entertainment filled with immense opportunities.

The combined company will create a comprehensive entertainment business, enabling us to serve our consumers with wider content choices across platforms. I am immensely grateful to the teamsat ZEEL, SPE and SPNI for their efforts, that swiftly led us to this point within the stipulated timelines. This merger presents a significant opportunity to jointly take the businesses to the next level and drive substantial growth in the global arena. I look forward to working with the guidance of the esteemed members of the combined company’s board to unlock the potential of this merger, and I wish N.P. Singh all the best in his new role at SPE. His contribution to the Indian media & entertainment industry has been invaluable. I am most certain that our collective wisdom, rich experience and expertise will lead to a more value accretive and exciting company for our shareholders and employees, and a more engaging one for our customers and partners.”

“Today marks an important step in our efforts to bring together some of the strongest leadership teams, content creators, and film libraries in the media business to create extraordinary entertainment and value for Indian consumers,” said Mr. Ravi Ahuja, SPE’s Chairman of GlobalTelevision Studios and SPE Corporate Development. “I want to thank Punit and his team at ZEE Land the small army of people at SPE and SPNI who have worked so hard to get us to this point I especially want to thank N.P. Singh, who presented us with the idea to explore this merger well over a year ago. N.P. has done extraordinary work building SPNI to what it is today, and we look forward to continuing our work with him in his new role after closing.”

MD & CEO, SPNI, Mr. N.P. Singh, added, “This merger will create a company that’s best in class and will redefine the contours of the media and entertainment industry. As a representative of SPE on the Board of the new merged company, it will be my endeavour to provide strategic guidance and support to the company’s operating team in achieving our vision. I am also excited at the opportunity of being appointed, Chairman, Sony Pictures India, to oversee SPE’s investments and craft a wider footprint for Sony in India.”

SPE was advised on this transaction by Morgan Stanley, KPMG Corporate Finance, and Shardul Amarchand Mangaldas & Co. ZEEL was advised by KPMG, JP Morgan, Trilegal and Boston Consulting Group.

Board of ZEEL gives in-principle approval for the merger between ZEEL & Sony Pictures Networks India

Authorises the management to proceed with the due diligence process
• Shareholders of SPNI to infuse growth capital in SPNI as part of the merger
• Significant synergies between ZEEL & SPNI to enhance the overall content creation approach and drive digital platform growth
• Punit Goenka to continue as Managing Director & Chief Executive Officer of the merged entity

MUMBAI, 22nd September 2021: The Board of Directors of ZEE Entertainment Enterprises Limited (ZEEL) present and voting in its board meeting held on 21st September 2021, unanimously provided an in-principle approval for the merger between Sony Pictures Networks India (SPNI) & ZEEL

The Board has evaluated not only on financial parameters, but also on the strategic value which the partner brings to the table. The Board concluded that the merger will be in the best interest of all the shareholders & stakeholders. The merger is in line with ZEEL’s strategy of achieving higher growth and profitability as a leading Media & Entertainment Company across South Asia.
The Board has authorized the management of ZEEL to activate the required due diligence process.

The shareholders of SPNI, will hold a majority stake in the merged entity. The shareholders of SPNI will also infuse growth capital into SPNI as part of the merger such that SPNI has approximately USD 1.575 billion at closing, for use in pursuing other growth opportunities.

Basis the existing estimated equity values of ZEEL and SPNI, the indicative merger ratio would  have been 61.25% in favour of ZEEL. However, with the proposed infusion of growth capital into SPNI, the resultant merger ratio is expected to result in 47.07% of the merged entity to be held by ZEEL shareholders and the balance 52.93% of the merged entity to be held by SPNI shareholders.

ZEEL & SPNI have entered into a non-binding term sheet to combine both companies’ linear networks, digital assets, production operations and program libraries. The term sheet provides an exclusive period of 90 days during which ZEEL and SPNI will conduct mutual diligence and finalize definitive agreement(s). The merged entity will be a publicly listed company in India.

As part of the transaction, Mr. Punit Goenka will continue to be the Managing Director and CEO of the merged entity. Further, certain non-compete arrangements will be agreed upon between the promoters of ZEEL and the promoters of SPNI. According to the term sheet, the promoter family is free to increase its shareholding from the current ~4% to up to 20%, in a manner that is in accordance with applicable law. Majority of the Board of Directors of the merged entity will be nominated by Sony Group.

It is anticipated that the final transaction would be subject to completion of customary due diligence and execution of definitive agreements and required corporate, regulatory and third-party approvals, including the votes of ZEEL’s shareholders.

ZEEL’s strong expertise in content creation and its deep consumer connect established over the last 3 decades , coupled with SPNI’s success across entertainment genres (including gaming and sports) will add significant value to the merged entity and its management team, thereby increasing shareholder value multifold.

Speaking on the development, Mr. R. Gopalan, Chairman, ZEE Entertainment Enterprises Ltd. said, “The Board of Directors at ZEEL have conducted a strategic review of the merger proposal between SPNI and ZEEL. As a Board that encompasses a blend of highly accomplished professionals having rich expertise across varied sectors, we always keep in mind the best interests of all the shareholders and ZEEL. We have unanimously provided an in-principle approval to the proposal and have advised the management to initiate the due diligence process.

ZEEL continues to chart a strong growth trajectory and the Board firmly believes that this merger will further benefit ZEEL. The value of the merged entity and the immense synergies drawn between both the conglomerates will not only boost business growth but will also enable shareholders to benefit from its future successes. As per legal and regulatory guidelines, at the required stage, the proposal will be presented to the esteemed shareholders of ZEEL for their approval.”

Under the guidance of the Board, the management of ZEEL, ably led by Mr. Punit Goenka, continues to steadily work towards achieving higher profitability in line with its set goals for the future. With this corporate development, the merged entity will result into an accelerated growth and a significant opportunity to create tremendous value for all its stakeholders.