Sony Group Corp’s India unit and Zee Entertainment Enterprises Limited (ZEEL) may be closing their merger deal in November. Last month, Sony Group reportedly said that the merger deal would take a few more months due to various clauses. The much-awaited Zee-Sony merger, which is being pegged as one of the biggest deals in the media industry in India, was previously expected to be completed by the end of September.
Sony Group Corp’s India unit and Zee Entertainment Enterprises Limited (ZEEL) may be closing their merger deal in November, a report said on Wednesday. The much-awaited Zee-Sony merger, which is pegged as one of the biggest deals in the media industry in India, was previously expected by the end of September. Last month, Sony Group reportedly said that the merger deal would take a few more months due to various clauses.
The big-ticket merger, which was announced in December 2021, will bring together over 70 TV channels, two video streaming services (Zee5 and SonyLiv) and two film studios (Zee Studios and Sony Pictures Films India).
Despite facing opposition from financial institutions and lenders such as Axis Finance and IDBI, who have challenged the National Company Law Tribunal’s (NCLT) decision approving the merger scheme before the National Company Law Appellate Tribunal (NCLAT), the merger can come into effect by November, the Economic Times reported.
The Boston Consulting Group (BCG), which has been tasked with completing the integration process, is working overtime to complete the responsibilities associated with the merger, the report said.
“Our aim is to finish the merger by early November. The teams on both sides are working incredibly hard to finish the merger-related formalities,” said a senior official told ET.
The Zee-Sony merger was approved by the National Company Law Tribunal (NCLT) on August 10 this year, dismissing objections from various creditors to Zee. Subsequently, both companies approached the tribunal to seek approval for the merger, having already obtained necessary permissions from the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and other regulatory bodies like the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI).
Several lenders of ZEEL, including IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co and Imax Corp, had raised objections around the merger.
Last week, NCLAT refused to issue a notice in the appeals filed by Axis Finance and IDBI Bank challenging the National Company Law Tribunal (NCLT) order approving the Zee-Sony merger.
The NCLAT has adjourned the case to October 31 and said ZEEL can file a response if needed.
In September, Karan Taurani, senior vice-president, research at brokerage Elara Capital, said the proposed Zee-Sony merger may see the light of day by December.
“The record date for a merger is usually given one week prior to delisting. However, there could be a marginal delay in filing closing precedents (CPs) of the merged entity. Subsequently, relisting may happen in the second week of December 2023 versus the second week of November,” Taurani said.
Earlier it was reported that the global entertainment unit of Japan’s Sony Group, has initiated preliminary talks with Walt Disney Co. about a potential acquisition of its India business due to the delay in the merger deal. The company is reportedly looking at it as a contingency plan in case its ongoing merger agreement with Zee faces more delays or doesn’t materialise since it has been in the works for almost two years.
According to Elara Capital, Sony is looking out for a strategic partner for its India and global (TV) business but it’s unlikely that the Disney-Sony deal will go through since there is a wider overlap for both platforms as they both cater to urban audience in a big way. “Regulatory approvals like CCI, NCLT may take over a year. CCI may not provide clearance or ask to shutdown channels, as Sony/Disney will have a much larger TV ad market share of 45 per cent (Zee/Sony TV ad market share is 25 per cent),” Taurani said on October 16.
Shares of Zee Entertainment Enterprises Limited were trading at Rs 260.25, up by 1.84 per cent, at 10.40 AM.
Also read: Zee-Sony merger delay: Sony looks at a potential acquisition of Disney’s India business
Also read: Sony Group says Zee-Sony merger to take a few more months: Report
