Sony-Zee Merger To Extend Beyond September, To Take Few More Months: Sony Group

The $10-billion merger, originally announced in 2021, has encountered numerous obstacles even after obtaining approval from the National Stock Exchange, BSE, and regulatory bodies, including SEBI

Sony Group Corp on Friday said that the merger of its Indian unit with Zee Entertainment Enterprise expected to be completed by September this year, would likely take more months. Although Sony did not elaborate on the reason for the delay, it said that Sony continues to assess the impact of the transaction on its consolidated financial results.

"Regarding the merger of Sony Pictures Networks India, a wholly-owned subsidiary of Sony Group Corporation (“Sony”), with Zee Entertainment Enterprises Ltd., a publicly listed Indian media and content company, which was previously announced on December 22, 2021, the National Company Law Tribunal in India approved this transaction on August 10, 2023, and both companies continue to proceed with the necessary procedures to complete the transaction," the company statement said. 

"Although the transaction was previously expected to close by the end of the first half of the fiscal year ending on March 31, 2024, based on the latest progress, it is currently expected to close in the months ahead," it further added. 

The $10 billion merger, originally announced in 2021, has encountered numerous obstacles even after obtaining approval from the National Stock Exchange, BSE, and regulatory bodies including the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI).

Operational and financial creditors had raised objections to the Zee-Sony merger scheme in the NCLT. In its August 10 order, the Mumbai bench of NCLT had dismissed legal objections regarding the merger of Zee and Sony India, which had been raised by lenders including Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship. A number of petitions have been filed against the order with NCLAT.  

Meanwhile, SEBI has imposed a one-year ban on Zee's CEO, Punit Goenka, and Chairman Subhash Chandra Goenka. Punit Goenka's role as the CEO of the merged entity was reportedly a pivotal aspect of the merger plan. In response, Zee has established an interim committee overseen by its board to oversee operations.

Punit Goenka stated in June that the merger would proceed irrespective of his position as CEO of the new entity. Earlier, in February, a tribunal halted insolvency proceedings initiated by IndusInd Bank Ltd against Zee, providing significant relief to the media company. The company later resolved its dispute with the lender.

Separately, IDBI Bank is embroiled in another legal matter involving ZEEL, and the NCLAT has issued a notice to the entertainment company led by the Subhash Chandra family. IDBI Bank contested the NCLT's May 19 decision, which had dismissed a plea to initiate insolvency proceedings against the media giant.