Zee-Sony Fallout: $10 Billion Merger Likely To Be Called Off, Report Says

Zee-Sony Fallout: $10 Billion Merger Likely To Be Called Off, Report Says

On December 21, 2021, Sony Pictures Networks India Pvt Ltd (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) announced their merger through definitive agreements.

Rahul MUpdated: Monday, January 08, 2024, 05:05 PM IST
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Zee-Sony Fallout: $10 Billion Merger Likely To Be Called Off, Report Says | Photo: Twitter

Sony Group Corporation is planning to call off the USD 10 Billion merger agreement between its India unit and Zee Entertainment Enterprises Ltd, according to reports said on Monday.

Sony is in the process of issuing a termination notice to Zee before January 20, according to sources familiar with the situation, Bloomberg News reported on Monday.

SPNI Refuses ZEEL's Merger Deadline Extension

On December 19, 2023, Sony Pictures Networks India (SPNI) stated that it hasn't agreed to Zee Entertainment Enterprises Ltd's (ZEEL) deadline extension for their merger. SPNI expressed interest in understanding ZEEL's plan to fulfill the remaining critical closing conditions. ZEEL's notice, seeking a merger deadline extension dated December 17, is seen by SPNI as an acknowledgment of their inability to meet the December 21, 2023, closing deadline. As per the deal's terms, both parties can discuss extending the deadline, but SPNI has not yet consented to an extension.

ZEEL Deadline Extension for Proposed Merger with Culver Max Entertainment

Earlier on December 17, 2023, ZEEL in a regulatory filing said it has sought an extension for the December 21, 2023 deadline regarding its planned merger with Culver Max Entertainment (CMEPL), formerly known as Sony Pictures Networks India. ZEEL approached Culver Max and Bangla Entertainment Pvt Ltd (BEPL) seeking an extension to finalize the merger, aiming to create India's largest media conglomerate.

CMEPL and BEPL are both indirect wholly-owned subsidiaries of Sony Group Corporation (SGC) and have garnered regulatory approvals from various entities, including the CCI, NSE, BSE, shareholders, and creditors for the proposed USD 10-billion merger.

About the Zee-Sony Merger

On December 21, 2021, Sony Pictures Networks India Pvt Ltd (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) announced their merger through definitive agreements. The merger involves combining ZEEL into SPNI, integrating their linear networks, digital assets, production operations, and program libraries.

Upon the merger announcement in September, Sony's US dollar 1.575 billion investment was set to grant them a 52.93 per cent stake in the new entity, while Zee would hold the remaining 47.07 per cent.

Additionally, Sony Pictures Entertainment Inc (SPE) agreed to pay a non-compete fee to certain ZEEL founders as part of the deal. The founders aimed to infuse this fee as primary equity capital into SPNI.

Post-merger closure, SPE would indirectly hold a majority stake of 50.86 per cent in the combined company, with ZEEL promoters holding 3.99 per cent, and other ZEEL shareholders owning a 45.15 per cent stake.

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