Soni-Zee merger: Culver Max Entertainment Private Limited (CME), formerly known as Sony Pictures Networks India Private Limited, has announced the completion of its proposed merger with Zee Entertainment Limited on January 22. Sony issued a notice to Zee Entertainment Enterprises Limited (ZEEL), informing about the cancellation of the agreement of merger of ZEEL and CME dated December 22, 2021.
This deal was to be completed by 21 December 2023. According to the agreement, extension can be taken three times. Zee had then asked for an extension. After this, news came that Sony has agreed to extend the date of merger. The main issue was who would lead the new company. If this merger had happened, Zee and Sony would have created a huge media company with a valuation of around $10 billion, which would have the power to compete with global giants like Netflix and Amazon.
Why couldn’t the merger happen?
According to the report, this merger could not be completed till its last date because the conditions related to the merger were not fulfilled. After the one month grace period ended, Sony sent a notice to Zee to end the deal. It is noteworthy that the Mumbai Bench of the National Company Law Appellate Tribunal had given approval for the merger in August last year.
The second largest merger would have been
If this merger had happened, the merger of Zee and Sony would have been the second biggest merger after Star and Disney India. OTT apps of Zee and Sony would come under one banner. A large number of channels from entertainment to sports and movies would be in the hands of one company.
What was Sony’s argument?
Puneet Goyal is facing investigation by SEBI. Due to the restrictions imposed on him, Sony Group did not agree with his leadership. But Zee International was emphasizing more on the fact that when the merger agreement was agreed upon in the year 2021, Goenka was mentioned to lead the new entity.
What is the matter with SEBI?
SEBI had refused to allow Punit Goenka to hold the management post after the fund misappropriation case. Since then, Sony Group has been continuously getting its condition fulfilled on the basis of this decision. Even though Goenka got relief from SEBI on this matter, no consensus could be reached between the two groups.