Zee Calls Report Indicating Sony Merger Collapse 'Factually Incorrect'
News agency Bloomberg reported on Tuesday that the two-year-old merger plan risked collapse over leadership issues.
Zee Entertainment Enterprises Ltd. denied a recent media report indicating risks to its planned merger with Sony Group Corp.’s India unit, calling it "factually incorrect."
The news agency Bloomberg reported on Tuesday that the two-year-old merger plan risked collapse over leadership issues.
Zee said it is continuing to work towards a "successful closure" of the proposed merger, according to the scheme approved by the Mumbai bench of the National Company Law Tribunal in its exchange filing on Wednesday.
According to the Bloomberg report, Zee is insisting that its Chief Executive Officer Punit Goenka—also its founder’s son—helm the new entity as agreed in the pact signed in 2021, while Sony is wary of his appointment given a regulatory probe against Goenka.
The Sony-Zee deal sought to create India’s biggest entertainment company with the financial muscle to challenge global powerhouses, including Netflix and Amazon.com Inc., as well as local conglomerates such as Reliance Industries Ltd.
The proposed merger has received almost all regulatory approvals.
Sony will own a 50.86% stake in the merged entity, and Goenka’s family will own 3.99% if the deal goes through, with public shareholders in possession of the remaining stake, according to the 2021 agreement.
Shares of the Subhash Chandra-founded media company declined 2.38% on Wednesday to close at Rs 249.7 apiece after the Bloomberg report. The clarification came after market hours.
In the nearly two years since the merger was announced, the scrip has lost value by as much as 26%.