The fate of the planned merger between Sony Group Corp’s Indian unit and Zee Entertainment Enterprises Ltd could be known as early as next week, according to people familiar with the matter, as the companies face deadlines to resolve their impasse or face long delays. Is facing. A deal is awaited to create a $10 billion media giant.
Unless the two sides agree on who will lead the merged entity and who will finalize the merger, Sony may send a letter to Zee next week saying the merger is set to take place, the people said. The demands cannot be met. , who asked not to be named because the information is not public. The people said this could be the death knell for the deal as there would not be enough time to tie up all the loose ends by the December 21 formal deadline.
Zee is emphasizing that its Chief Executive Officer Punit Goenka — also the son of its founder — will lead the new entity, as agreed in the deal signed in 2021, while Sony is wary of his appointment given the regulatory probe against Goenka, the people said. This has led to a prolonged tussle with the two-year-old merger plan, which has already seen much drama and delays.
Without commenting on the leadership issue, a Zee representative said in an email response that the company was “actively engaged” to ensure timely completion of all required terms for the deal. Zee has already completed most of them and is in touch with Sony “on a regular basis”, he said. Sony representatives did not respond to requests for comment.
Market regulator Securities and Exchange Board of India in June alleged that the Mumbai-based media house made fraudulent recovery of loans to cover private financing deals by its founder. Subhash Chandra, Chandra and his son Goenka “abused their position” and misappropriated funds, SEBI said in an interim order.
While Goenka got relief from an appellate authority against the Sebi order — it barred him from holding an executive or director position in a listed company — the people said Sony still considered the ongoing investigation a pending corporate governance issue. Sees as. Local newspaper Mint first reported the impasse.
who blinks first
Last round of tussle is bringing merger to the brink collapse Unless one of the partners blinks. The Sony-Zee deal seeks to create India’s largest entertainment company with the financial muscle to challenge global powerhouses such as Netflix Inc and Amazon.com Inc as well as local conglomerates. Reliance Industries Ltd.
As per the 2021 agreement, Sony will hold 50.86% stake in the merged entity and Goenka’s family will hold 3.99% stake, while the remaining stake will be held by public shareholders. Sony is not considering extending the December 21 deadline, the people said.
Of course, the proposed merger has received almost all regulatory approvals and could still be closed if both parties resolve their issues quickly. They can also request the company court of India to extend the merger deadline.
If the deal closes, the transaction will help expand Sony’s media business in the world’s most populous country, which has more than 75 television channels and 37% of the world’s television market, according to a note from brokerage firm Motilal Oswal Financial. market share, which is ahead of Disney-owned Star’s 24%. Services Limited
Bloomberg News reported last month that consolidation in the sector is already heating up with Reliance, which had previously tried to buy Zee, in advanced talks to buy Walt Disney Co’s India operations.
Unless the two sides agree on who will lead the merged entity and who will finalize the merger, Sony may send a letter to Zee next week saying the merger is set to take place, the people said. The demands cannot be met. , who asked not to be named because the information is not public. The people said this could be the death knell for the deal as there would not be enough time to tie up all the loose ends by the December 21 formal deadline.
Zee is emphasizing that its Chief Executive Officer Punit Goenka — also the son of its founder — will lead the new entity, as agreed in the deal signed in 2021, while Sony is wary of his appointment given the regulatory probe against Goenka, the people said. This has led to a prolonged tussle with the two-year-old merger plan, which has already seen much drama and delays.
Without commenting on the leadership issue, a Zee representative said in an email response that the company was “actively engaged” to ensure timely completion of all required terms for the deal. Zee has already completed most of them and is in touch with Sony “on a regular basis”, he said. Sony representatives did not respond to requests for comment.
Market regulator Securities and Exchange Board of India in June alleged that the Mumbai-based media house made fraudulent recovery of loans to cover private financing deals by its founder. Subhash Chandra, Chandra and his son Goenka “abused their position” and misappropriated funds, SEBI said in an interim order.
While Goenka got relief from an appellate authority against the Sebi order — it barred him from holding an executive or director position in a listed company — the people said Sony still considered the ongoing investigation a pending corporate governance issue. Sees as. Local newspaper Mint first reported the impasse.
who blinks first
Last round of tussle is bringing merger to the brink collapse Unless one of the partners blinks. The Sony-Zee deal seeks to create India’s largest entertainment company with the financial muscle to challenge global powerhouses such as Netflix Inc and Amazon.com Inc as well as local conglomerates. Reliance Industries Ltd.
As per the 2021 agreement, Sony will hold 50.86% stake in the merged entity and Goenka’s family will hold 3.99% stake, while the remaining stake will be held by public shareholders. Sony is not considering extending the December 21 deadline, the people said.
Of course, the proposed merger has received almost all regulatory approvals and could still be closed if both parties resolve their issues quickly. They can also request the company court of India to extend the merger deadline.
If the deal closes, the transaction will help expand Sony’s media business in the world’s most populous country, which has more than 75 television channels and 37% of the world’s television market, according to a note from brokerage firm Motilal Oswal Financial. market share, which is ahead of Disney-owned Star’s 24%. Services Limited
Bloomberg News reported last month that consolidation in the sector is already heating up with Reliance, which had previously tried to buy Zee, in advanced talks to buy Walt Disney Co’s India operations.
(TagstoTranslate)Business News(T)Subhash Chandra(T)Sony-G merger(T)Reliance Industries(T)Puneet Goenka(T)Fall(T)CEO Drama