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MUMBAI/DELHI : While the proposed merger of Zee Entertainment Enterprises Ltd and Sony Pictures Networks India is still to gain approvals from courts, shareholders and regulators, the business plan that got the thumbs up from the boards of Sony’s India unit and Zee envisage the combined entity making an aggressive bid for broadcast rights of the Indian Premier League (IPL) cricket tournament that is coming up for auction in December, according to people familiar with the plans.

The cash that will be available to what will be a zero-debt business, including the $1.5 billion that Sony will be investing, will be leveraged to put in a competitive bid in a contest that is estimated to take the bidding war upwards of 32,000 crore for five years. In 2017, Star India paid 16,000 crore for the media rights to the property.

“Sony will bring in more money if required. They know they are in play in this market now, and they are going to go big," a person with knowledge of the plans said, asking not to be identified. In 2008, Sony had won 10-year rights in the inaugural IPL rights auction for 8,200 crore.

The media company might also partner with Amazon Prime Video to make a joint bid that will split the digital and broadcast rights among the partners, the person added.

Spokespeople for Zee, Sony and Amazon Prime Video did not respond to a request for comment.

Betting big on sports rights and creating so-called tentpole content properties for India are key to the plans of the merged company that will be renamed Sony Pictures Network India Ltd if the deal goes through.

The reconstituted board will consist of six Japanese and three American executives, and the only Indian representative will be managing director Punit Goenka.

The plan is to retain the Zee brand in all of its properties, with the tagline ‘A Sony company’. The exception is likely to be in digital streaming, where Zee 5 and Sony Liv will merge to make way for an app with Sony branding. This will go head-to-head with Disney-Hotstar, Amazon Prime Video and Netflix for domination in one of the world’s largest consumer markets. The app, which will benefit from Zee’s library of more than 5,300 movies, will also see Sony bringing in 200 global titles that have never been distributed in India. “Zee is a weekday network that skews semi-urban and rural, with a female-heavy audience hooked to serials. Sony is a weekend network with a sports focus that skews male and urban. You bring the two together, and you are getting great complementarity," the person said.

If the deal goes through, an integration panel will be appointed to oversee the integration of the two firms, and this committee will decide all key appointments in management ranks. While the merger will see a change in control, it will not trigger an open offer as an exemption laid down in section 391 of the Companies Act will be applicable. “In the case of any merger, the two legal entities need to approach the court or the company law tribunal, and if such a merger process is approved by the court, it does not require to make a public offer. This provision is given under section 391 of the Companies Act. Approval by a majority of shareholders is required," said Sandeep Parekh, founder and CEO of Finsec Law Advisors, who is also a former executive director of Sebi.

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