Zee, Sony merger called off
January 22, 2024
By Chris Forrester
The long-awaited ZEEL-Sony merger is off. Despite reports over the weekend that the $10 billion merger between Zee Entertainment Ltd (ZEEL) and Sony’s Culver Max Entertainment was close, news has emerged that Sony has run out of patience and had sent a “termination letter” to ZEEL.
Bloomberg is reporting that a key meeting was held on January 19th where Sony’s executives made their decision.
In a regulatory filing ZEEL stated that it was “not aware of, and cannot comment on” any board meeting at Sony.
Nevertheless, an already extended completion date of January 20th. It has now expired. The merger deal was first signed back on September 9th 2021 and the (then) completion date was December 21st 2023.
The ZEEL filing continued, saying: “We wish to reiterate that the Company is committed to the merger with Sony and is continuing to work towards a successful closure of the proposed merger and is engaging in good faith negotiations with Sony with a view to discuss the extension of the date required to make the Scheme effective, by a reasonable period of time.”
Moreover, some reports say that ZEEL has officially requested more time to resolve key matters and the filing talks of the “good faith” extension to wrap everything up.
One stumbling block concerns ZEEL boss Punit Goenka’s appointment as the MD and CEO of the merged entity since India’s Securities Exchange Board of India’s (Sebi) probe into affairs at ZEEL continues to hang over his head. Goenka has reportedly offered to give up the planned role.
If a deal is to be resurrected then the combined entity will own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India.
Shares in ZEEL, already under pressure because of the delays, fell 5.1 per cent on January 19th. Overall, ZEEL shares have tumbled by 30 per cent since the deal was first announced. There will be a further fall on January 24th.