Sony is waiting to hear the Indian media company’s ideas and how they intend to finalise the last few crucial closing requirements before agreeing to a deadline extension for their merger with Zee.
Sony released a statement in response to Zee Entertainment Enterprises Ltd. ‘s (ZEEL) earlier this week asking that the Sony Group firms extend the deadline for completing their merger, which is December 21.
“The notice that ZEE sent on December 17 to the National Stock Exchange of India and the Bombay Stock Exchange acknowledges that they would not be able to finalise the SPNI/ZEE merger by the deadline of December 21, 2023. The notification activates an already-existing clause in the agreement that permits both parties to talk about extending the deadline,” a statement from Sony stated.
Although SPNI has not yet consented to a deadline extension, it is necessary to initiate those discussions. We eagerly await ZEE’s recommendations and their strategy for completing the last few crucial closing requirements,” the statement continued.
Zee Entertainment’s shares were down 3.8% at Rs 269.85 a share on the BSE Sensex at 10:08 p.m.
In December 2021, Sony and Zee agreed to merge. In eight or ten months, the deal was supposed to close. Two years later, it still hasn’t been finished because of the Sebi injunction against the company’s promoters and the lawsuits brought by financial institutions against ZEEL.
Following completion, the merger will create a $10 billion media conglomerate that will be a leader in TV, OTT, and content production. The combined revenue of ZEEL and Sony was about Rs 15,000 crore, according to the FY23 financials. With the Sony-Zee agreement, the goal was to establish the largest entertainment firm in India, capable of taking on both domestic giants like Reliance Industries Ltd. and Disney, as well as international giants like Netflix Inc. and Amazon.com Inc.
According to a report from brokerage company Motilal Oswal Financial Services Ltd., the acquisition will aid in the expansion of Sony’s media business in the most populous nation on earth, where it now has over 75 television channels and a 37% market share, ahead of Disney-owned Star’s 24%. With the planned Reliance-Disney joint venture, the Sony-Zee goliath will face off against it directly in an almost duopolistic market.
But there are a number of issues with the arrangement.
Prior to the merger of Zee Entertainment Enterprise with Culver Max Entertainment, previously Sony Pictures Networks India, creditors IDBI Bank and Axis Finance have filed appeals. They had contested the National Company Law Tribunal’s (NCLT) August 10, 2023, Mumbai bench’s merger approval ruling.
By filing an appeal with the NCLAT, IDBI and Axis Finance challenged this ruling.
On December 15, NCLAT decided not to grant a merger stay. However, the mammoth merger is being contested, and the tribunal has issued notice in that plea. It has scheduled a hearing for January 8. This indicates that while the merger is no longer in jeopardy, the lawsuit’s shadow still exists.
