Deadline over; Sony not keen to extend good faith negotiations with Zee, $10 billion merger likely terminated
Sony Group Corp is unlikely to extend the good faith negotiations with Zee Entertainment Enterprises Ltd. (ZEEL) — whose deadline was supposed to lapse on midnight of January 21, said people aware of the matter.
This would mean the likely termination of the proposed $10 billion merger between its India operations and Zee to create the largest media giant in the country. Zee sought an extension of the «good faith» negotiations last week.
A formal communication calling off the mega amalgamation first announced in December 2021 is expected to be sent to the Tokyo exchanges in the next forty-eight hours, said people aware.
The chairman of the Zee Entertainment board or Punit Goenka, the MD and CEO of the company will also be informed, the people mentioned above added.
Sony Global's spokesperson was not available for an immediate comment late on Sunday night.
Sony chose not to continue with the negotiations for the lapses by Zee in complying with what are called conditions precedents (CP) in legalese and for the failing financial health of Zee Entertainment.
This has been adding to the simmering discontentment between the suitors, who thus far couldn’t agree on ZEEL MD Punit Goenka being the CEO of the merged entity until he’s cleared of charges that he siphoned off money from the publicly traded firm to closely held companies owned by his family’s Essel Group.
The Goenka family owns 3.99% equity in ZEEL. The rest are owned by public and institutional shareholders.
People close to Sony said the multinational has offered Goenka the role of advisor at the new company, but said he should not be on the board, pending regulatory investigations.
Sony has been rooting for NP Singh, its India MD and CEO, as chief executive of
