Zee-Sony merger teeters on the brink of collapse
Zee Entertainment Enterprises Ltd. This brings the country’s largest-ever entertainment deal to the brink of collapse after months of debate over the appointment of a chief executive officer (CEO) for the merged entity. Two persons aware of Sony’s plans confirmed this on condition of anonymity.
In December 2021, Sony agreed to take over Zee and merge it with the former’s Indian arm Culver Max Entertainment Pvt. Ltd, earlier called Sony Pictures Networks India, to create an entertainment giant commanding a market share of over 28%. The deal has secured all regulatory approvals as well as shareholders’ nod.
On Sunday, Zee had requested Sony for more time to complete the merger. However, Sony has decided neither to extend the merger date beyond the 21 December deadline nor go ahead with the deal unless Chandra’s son Punit Goenka (current managing director and CEO of Zee) agrees to not hold the same position in the merged entity, the people cited above said. “Sony is clear: It won’t extend the merger deadline.
If Punit doesn’t change his decision, the deal will stand terminated," said the first person. “One has to put shareholders’ interest before personal gains. If this deal fails to go through, it will not only make Chandra and Punit’s control vulnerable as Zee promoters, but also may destroy shareholders’ wealth," the person added.
Queries sent to Sony and Zee spokespersons remained unanswered till press time. Mint first reported on 10 November that talks between the two parties have stalled after Sony’s demand for the CEO role, and that a failure to reach an agreement may derail the merger. As per the original deal terms signed two years ago, Goenka was supposed to be the MD and CEO of the merged entity.
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