Sony-Zee merger may collapse ahead of a deadline owing to conflicts over CEO

28 Nov 2023 , 01:53 PM

According to people familiar with the matter, the fate of the planned merger between Sony Group Corp.’s India unit and Zee Entertainment Enterprises Ltd. could be known as early as next week, as the companies face a looming deadline to resolve their standoff or scuttle a long-awaited deal to create a $10 billion media giant.

Unless the two parties can agree on who would run the merged firm and finalize the merger, Sony is expected to write a letter to Zee next week stating that the merger’s stated demands could not be satisfied, according to the sources, who requested not to be identified since the information isn’t public.

According to the sources, this might spell the end of the transaction because there won’t be enough time to wrap up all the loose ends before the formal December 21 deadline.

According to the sources, Zee is adamant that its Chief Executive Officer Punit Goenka — also its founder’s son — lead the new firm, as envisaged in the 2021 agreement, while Sony is leery of his selection given a regulatory inquiry into Goenka. This has caused a last-minute spat in the two-year-old merger proposal, which has already seen its fair share of drama and delays.

The markets regulator, the Securities and Exchange Board of India, said in June that the Mumbai-based media business fabricated debt recovery to mask private funding agreements by its founder, Subhash Chandra. In an interim decision, SEBI stated that Chandra and his son, Goenka, ‘abused their position’ and syphoned off monies.

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