Sony’s India unit says it is yet to agree to Zee’s merger deadline extension request

Sony Group Corp’s Indian unit said on Tuesday that it has not yet agreed to Zee Entertainment Enterprises’ request to extend the merger deadline. The completion of the merger to create a $10 billion media and entertainment powerhouse, has a deadline of December 21. 

"The notice (from Zee) triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline," Sony Pictures Networks India (SPNI) said in a statement. "SPNI is required to start those conversations but has not yet agreed to a deadline extension," it said. Sony said that it would hear Zee’s proposals and plans on how it aims to complete the remaining critical closing conditions.  

Zee Entertainment Enterprises said on Sunday that it requested Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India Private Limited) for an extension of the timeline to complete the merger. 

Shares of Zee Entertainment were last seen trading 3.81 per cent lower at Rs 269.85 against their previous close of Rs 280.55. Despite the drop, the stock has gained around 46 per cent in the last six months.

The extension request came after two independent directors were unable to secure their reappointment to the Zee board. Independent directors Sasha Mirchandani and Vivek Mehra “failed to get the requisite majority of votes”, the company said in an exchange filing.

As per a report in Reuters, the reappointment of the two Zee Entertainment independent directors could have influenced the selection of the head of the new merged entity. Three new independent directors Venkata Ramana Murthy Pinisetti, Shishir Babubhai Desai and Uttam Prakash Agarwal were appointed with effect from December 17, 2023.

It must be noted that Zee and Sony, ahead of the merger deadline, was locked in a showdown on who would head the merged entity – Zee CEO Punit Goenka or Sony’s MD for its India operations, NP Singh. When the pact was signed in 2021, it was agreed that Goenka would lead the entity but Sony is wary of his appointment due to a regulatory probe against him. 

The combined Zee-Sony entity would own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India). Zee in 2021 said the merged entity would become the largest entertainment network in India. 

(With Reuters inputs)

Also read: Zee requests Sony to extend timeline to complete merger