Zee Clears the Air: Sony Deal Alive but Facing Hurdles

9 Jan 2024 , 03:20 PM

In a stock exchange filing on Tuesday, Zee Entertainment refuted media reports that said the $10 billion merger with Sony Pictures’ India affiliate had been terminated.

The Puneet Goenka-led business said that the story is factually inaccurate and without foundation.

‘We wish to reiterate that the Company is committed to the merger with Sony and is continuing to work towards a successful closure of the proposed merger,’ the business stated.

After the clarification at 1:20 pm, Zee Entertainment shares, which had lost 8% at opening, recovered some of their losses to trade at 4.80%.

In an attempt to establish the largest broadcast corporation in India, the aforementioned merger was initially disclosed two years ago.

The failure to follow the so-called conditions precedents (CP) has exacerbated the already-brewing tensions between the suitors, who had not been able to come to an agreement on Punit Goenka, MD of Zeel, being the CEO of the combined company until he was cleared of all charges related to embezzling money from the publicly traded company to closely held businesses controlled by his family’s Essel Group.

In June, Goenka and Zee Group Chairman Subhash Chandra were accused by market regulator Securities and Exchange Board of India (SEBI) of embezzling corporate funds. But in October, the Securities Appellate Tribunal overturned Goenka’s suspension, preventing him from serving on the boards of Zee Group companies.

At ZEEL, the Goenka family holds a 3.99% equity stake.

The united company will be the largest entertainment network in India, holding over 70 TV stations, two film studios (Zee Studios and Sony Pictures Films India), and two video streaming services (ZEE5 and Sony LIV). The companies inked a comprehensive agreement for their merger in December of that year.

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