The Sony-Zee merger risks collapse as CEO dispute escalates, casting doubt on the deal's future ahead of the looming deadline
Sony Group Corp.'s India unit and Zee Entertainment Enterprises Ltd. are on the verge of a crucial juncture in their planned merger, with insiders suggesting that the fate of the deal may be revealed as early as next week, as per a report by Bloomberg.
The companies are currently facing a pressing deadline to either resolve their differences or abandon the anticipated merger altogether. This decision will ultimately determine the future of the proposed creation of a $10 billion media giant, a deal that has been eagerly awaited.
If an agreement on the leadership of the merged entity and the finalization of merger details cannot be reached between the two parties, Sony is expected to send a letter to Zee next week stating that the specified merger requirements cannot be fulfilled, as per sources cited by Bloomberg in its report. This could mark the end of the deal, as there would be insufficient time to address all the necessary details by the official deadline of December 21.
Zee is insisting that Punit Goenka, its CEO and founder's son, will lead the new entity as per the 2021 agreement. However, Sony is hesitant due to an ongoing regulatory probe against Goenka. This disagreement has sparked a last-minute dispute in the two-year-old merger plan.
As per the report, a Zee spokesperson, not commenting on leadership, stated in an email that the company is actively working to meet deal prerequisites, having completed most, and maintains regular communication with Sony.
The Sony-Zee deal aimed to establish India's largest entertainment company, capable of competing with global giants like Netflix and Amazon, as well as local conglomerates such as Reliance Industries.