Despite obtaining the necessary approvals for the merger between the two companies, disagreements arose regarding the selection of the chief executive officer for the combined entity.
Zee Entertainment sought an extension to complete its proposed merger with Sony India. Despite the merger agreement being inked in December 2021 with a completion cutoff date set for December 21, 2023, Zee has formally requested an extension for the merger process.
In compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Zee disclosed in a filing to India’s Bombay Stock Exchange and National Stock Exchange on December 18, “the company has requested CMEPL and BEPL to extend the Date required to make the Scheme effective, as per the terms of the Merger Cooperation Agreement.”
While the companies successfully navigated a significant regulatory hurdle in August, crucial matters, particularly related to leadership, remain unresolved. The initial plan had designated Zee’s CEO, Punit Goenka, as its leader, with Sony holding a 51% controlling stake. However, Goenka faced a temporary ban from managing any listed company in India following regulatory allegations of mismanagement and financial improprieties. The ban was later lifted in October after an appeal.
Another obstacle emerged when Axis Finance and IDBI bank contested the merger, alleging unpaid loans. India’s National Company Law Appellate Tribunal (NCLAT) refused to halt the merger earlier this week but scheduled a hearing for January 2024.
The potential merger of Zee and Sony holds the prospect of creating a broadcast TV giant valued at an estimated $10bn, a significant development in a sector that remains pivotal in India.
