 "Sony Group continues talks on merger with Zee amid reports on disputes")
Sony Group is actively engaged in discussions to merge its Indian subsidiary with Zee Entertainment Enterprises, with ongoing talks scheduled until January 20, sources familiar with the negotiations have said, according to a report by Nikkei Asia. Previous reports had hinted that Sony had considered cancelling the deal due to disagreements surrounding the appointment of the merged entity's CEO. However, discussions on the terms of the deal are still in progress, and Zee issued a release through BSE refuting media claims.
Sony-Zee merger
The merger agreement between Sony and Zee was signed in 2021, aiming for completion by the end of September the following year. The deal positions Sony as the majority stakeholder in the merged unit, which is anticipated to become India's largest broadcaster upon successful closure.
Although Indian regulators granted approval for the merger in August, Sony cited delays in September, and Zee requested an extension of the deadline in December. Recent reports suggested Sony might abandon the $10 billion merger, raising questions about its closure. Zee expressed commitment to the merger and ongoing efforts toward a successful conclusion. Sony has not issued any official statement regarding the media reports on merger disputes.
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Disputes of merger CEO
Zee Entertainment is advocating for its CEO, Punit Goenka, to assume leadership in the merged entity. Sony, however, is reportedly opposed to this choice due to alleged misuse of company funds by Goenka. This allegation is currently under investigation by the Securities and Exchange Board of India (SEBI). Sony seems hesitant to accept Goenka as CEO amid the ongoing investigation.
If the merger proceeds, the combined entity will pose a significant challenge to global streaming platforms like Netflix, Amazon Prime Video, and Disney+ Hotstar, as well as local competitors such as JioCinema. The final outcome of the negotiations and terms of the deal is expected to be clarified in the next three weeks before January 21, 2024, according to Elara Capital. The delay in advance payment to Disney by Zee is not seen as an indication of the merger falling through, added the report, as discussions between the parties continue.