New Delhi: The proposed USD 10 billion merger between Zee Entertainment Enterprises Ltd (ZEEL) and Sony Group Corp’s India unit has been scrapped after the two parties failed to agree on who will head the combined entity.
The deal, which was announced in September 2021, would have created one of the largest media and entertainment companies in India, with a combined market share of over 40 percent in the television segment.
However, the merger faced several hurdles, including regulatory scrutiny, shareholder dissent, and legal challenges. The main bone of contention was the role of Zee’s managing director and chief executive Punit Goenka, who was accused of financial irregularities and corporate governance lapses by some investors and the Securities and Exchange Board of India (SEBI).
Sony wanted Goenka to step down after the merger, while Zee insisted that he should continue as the leader of the merged entity. The deadlock led to Sony sending a termination notice to Zee on Monday, claiming that Zee had breached the terms of the merger agreement and seeking USD 90 million as break-up fees.
Zee, on the other hand, rejected Sony’s claims and said it was considering legal action against Sony. Zee said it had shown utmost commitment to the merger by taking several irreversible steps, such as selling its non-media assets, restructuring its debt, and settling disputes with lenders and content partners.
Goenka, who was among the invitees to the Ram Mandir Pran Prathistha ceremony in Ayodhya on Monday, took to X, a social media platform, to express his views on the merger collapse. He said he received a message about the deal falling through as he arrived in Ayodhya for the auspicious occasion. He said he believed this was a sign from the Lord and that he resolved to move ahead positively and work towards strengthening Zee, which he called Bharat’s pioneering media and entertainment company, for all its stakeholders.
