Sony Considers Termination Of $10 Billion Mega Merger With Zee Entertainment Over Leadership Dispute

The highly anticipated $10 billion merger between Zee Entertainment and Sony's India arm faces a potential termination, with Sony reportedly considering issuing a termination notice before 20 January.

The move comes as Sony is said to be uncomfortable with Punit Goenka leading the merged entity amid an ongoing regulatory probe, as reported by Bloomberg.

Despite the pact being signed in 2021 and obtaining all necessary regulatory approvals, the merger has faced numerous challenges, preventing its successful completion before the 21 December deadline.

Legal issues, including the leadership dispute between Sony and Zee, have contributed to the complications with Sony advocating for its Indian operations managing director, N P Singh, to be the top executive, while Zee supports Punit Goenka, reported Economic Times.

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It's important to note that in June, the Securities and Exchange Board of India (SEBI) had accused Goenka and Zee Group chairman Subhash Chandra of diverting company funds.

However, in October, the Securities Appellate Tribunal lifted the ban on Goenka, allowing him to hold board positions in Zee Group companies.

Culver Max Entertainment (formerly Sony Pictures Networks India) and ZEEL initially announced a non-binding term sheet to merge their linear networks, digital assets, production operations, and programme libraries.

The combined entity was poised to own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), creating the largest entertainment network in India.

However, the reported termination of the merger raises questions about the future of the deal and the dynamics between the two media giants.

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