Why the birth of a $10 bn media & entertainment behemoth still buffering up
Sony group's Indian arm Sony Pictures Networks India (now known as Culver Max Entertainment) and Zee Entertainment Enterprises Ltd. is likely to be put off by several months.
Zee has asked Sony to push back the deadline of December 21, 2023, for the merger which was inked on December 22, 2021.
The Sony-Zee deal sought to create India’s biggest entertainment company with the financial muscle to challenge global powerhouses, including Netflix Inc. and Amazon.com Inc., as well as local conglomerates such as Reliance Industries Ltd which is striking a deal with Disney.
If the deal is done, it will help expand Sony’s media business in the world’s most populous country, with over 75 television channels and a market share of 37%, ahead of Disney-owned Star’s 24%, according to a note from brokerage firm Motilal Oswal Financial Services Ltd.
The Sony-Zee behemoth will directly compete in a near-duopoly with Reliance-Disney joint venture which is in the works.
In December 2021, Sony and Zee signed definitive agreements to merge. Sony will indirectly hold a majority of 50.86% of the combined company; the founders of ZEEL will hold 3.99%; and the other ZEEL shareholders will hold a 45.15% stake.
The deal was anticipated to conclude in 8-10 months. However, two years down the line, it is yet to be completed due to regulatory investigation and legal suits, among other things, involving Zee and its promoters including MD & CEO Punit Goenka.
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