Sony plans to call off merger with Zee: Here's why
Sony Group Corp. is considering calling off its India unit's merger with Zee Entertainment Enterprises Ltd., as per Bloomberg. The deal, which aimed to create a $10 billion media powerhouse, has faced two years of setbacks and delays. The primary reason for the potential cancellation is a disagreement over whether Zee's CEO, Punit Goenka, would lead the combined company.
Leadership tussle and regulatory probe
The original agreement stated that Goenka would head the new organization. However, Sony has changed its stance on Goenka's leadership due to an ongoing investigation. In June, SEBI accused Zee of fabricating loan recoveries to conceal private financing deals by its founder, Subhash Chandra, and alleged that Chandra and his son, Goenka "abused their position" and diverted funds. Although an appellate authority granted Goenka relief from the SEBI order, Sony sees the continuing probe as a corporate governance issue.
Potential termination notice and ongoing discussions
Sony intends to submit a termination notice before the extended deadline of January 20, citing unfulfilled conditions necessary for the merger. Goenka has maintained his desire to lead the merged company as initially agreed during lengthy meetings in recent weeks. However, talks between Sony and Zee are still in progress, and a resolution could be reached before the deadline. Representatives for both companies have not yet commented on the matter.
