The much-anticipated media merger between Sony and Zee Entertainment appears to be on shaky ground with the former on Tuesday issuing a public statement, which is believed to be an unusual move in the business realm.
Responding to the request to extend the December 21 deadline by Zee Entertainment to close the proposed merger, Sony on Tuesday issued a statement to media stating that it has not yet agreed to a deadline extension adding that it is ready to discuss the issue.
A spokesperson of Sony Pictures Networks India said, “ZEE’s notice to the Bombay Stock Exchange and the National Stock Exchange of India dated December 17 is an acknowledgement that they will not be able to meet the December 21, 2023 deadline to close the SPNI/ZEE merger. The notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline. SPNI is required to start those conversations but has not yet agreed to a deadline extension. We look forward to hearing ZEE’s proposals and how they plan to complete the remaining critical closing conditions.”
Zee on Sunday approached SPNI for an extension in the deadline to complete the proposed merger, which will create India's biggest media conglomerate.
The proposed USD 10-billion merger has received regulatory approvals from fair trade regulator CCI, bourses NSE and BSE, shareholders and creditors of the company.
The merger is expected to create the largest media conglomerate in the country and is supposed to bring 75 channels, two video streaming services (Zee5 and SonyLiv) and two film studios (Zee Studios and Sony Pictures Films India) under a single entity.
Sony is reportedly objecting to a provision in the proposed deal that designates Punit Goenka as the CEO of the merged entity, citing concerns related to the ongoing Securities and Exchange Board of India (SEBI) investigation into a corporate governance case.
While Zee insists on adhering to the 2021 agreement, with Punit Goenka leading the firm, Sony remains hesitant due to the SEBI investigation against Goenka, according to the report.
On August 14, SEBI had imposed a ban on Goenka from holding key managerial roles in ZEEL and its affiliates. The ban, related to allegations of facilitating fund movements out of ZEEL and their complex return transactions, falsely portraying ZEEL's receipt of dues, was lifted by the Securities Appellate Tribunal (SAT) on October 30. This clearance allowed Goenka to resume his role in the planned merger with Sony Group's Indian unit.
In December 2021, Zee Entertainment Enterprises had announced a significant merger with Culver Max Entertainment.