UPDATED: The merger between India’s Zee Entertainment Enterprises and Sony’s Indian TV businesses has taken another twist with Sony not yet agreeing to the date extension requested by Zee.
Sony Pictures Networks India (SPNI) issued a statement on Tuesday, saying: “Zee’s notice to the Bombay Stock Exchange and the National Stock Exchange of India dated December 17 is an acknowledgement that they will not be able to meet the December 21, 2023 deadline to close the SPNI/Zee merger. The notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline. SPNI is required to start those conversations but has not yet agreed to a deadline extension. We look forward to hearing Zee’s proposals and how they plan to complete the remaining critical closing conditions.”
PREVIOUSLY: The proposed merger between Indian powerhouseZee Entertainment EnterprisesandSony‘s Indian TV businesses, which has been nearly two years in the making, is likely to be delayed further.
The merger agreement was signed in December 2021 and the cut-off date for completion was Dec. 21, 2023. However, Zee has now asked for an extension to the merger.
“Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR Regulations’), we hereby inform you that pursuant to the Merger Cooperation Agreement dated December 22, 2021 entered into amongst the Company [Zee], BEPL [Bangla Entertainment Private Limited] and CMEPL [Culver Max Entertainment Private Limited, formerly known as Sony Pictures Networks India Private Limited] 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,” Zee said in a filing to India’s Bombay Stock Exchange and National Stock Exchange on Sunday.
The companies cleared a key regulatory hurdle in August, but there are other matters pending, especially that of leadership. The original plan had foreseen that Zee’s CEO Punit Goenka would be its captain, while Sony would own a 51% controlling stake. However, Goenka was banned from managing any listed company in India following an interim regulatory report that accused him and Zee founder Subhash Chandra of running the company for their own benefit and “siphoning off” money.
The ban was lifted in October after an appeal.
The merger faced another roadblock when Axis Finance and IDBI bank had challenged it with India’s National Company Law Appellate Tribunal (NCLAT), claiming unpaid loans. However, NCLAT refused to pause the merger earlier this week and instead called for a hearing in January 2024.
The combined companies have the potential to create a giant in broadcast TV — a sector that is still paramount in India — and could be valued at $10 billion.
