The potential Sony-Zee merger, touted to be one of India’s largest media deals, is believed to continue, in a recent development. In the latest statement issued by the company on Wednesday, ZEEL said, “The company is now in receipt of a communication from CMEPL and BEPL that they will enter into good faith negotiations as required under the Merger Cooperation Agreement (MCA) entered amongst the Parties, the Company, CMEPL and BEP, with a view to discuss the extension of the date required to make the Scheme effective by a reasonable period of time.” This latest development means that the Sony-Zee merger will stay alive beyond the December 21 deadline and as per terms, Punit Goenka, who is the CEO and MD of Zee, will continue with his role in the merged entity as well.
Experts too opine that its business as usual. “In our view, there is a high likelihood of the merger going through, as Zee is also equally keen to do the merger, just as Sony,” said Karan Taurani, a media analyst at Elara Capital who was quoted by Reuters. Goenka will not risk the merger being called off, on the brink of him becoming CEO, Taurani added.
SEBI order against Goenka and relief by SAT
The setback to the merger came in the wake of the market watchdog – the Securities and Exchange Board of India (SEBI) – prohibiting Zee CEO Goenka from holding directorship positions in any listed company. This order came in August earlier this year. The Securities Appellate Tribunal, however, lifted the ban on Goenka in October. But the tribunal also said that he would have to cooperate with any probe by SEBI.
What next for Zee and Sony?
Both Zee and Sony would be required to get regulatory approvals for the extension of the merger deadline. Experts say that this usually takes up to four months. Once all approvals are in, the Sony-Zee merger would have to undergo a relisting process. Quoting Taurani, a Reuters report said that the merged entity would be listed on Indian stock exchanges by April next year.