The mega-merger between Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India (SNPI) was called off on January 22 with the latter issuing a termination letter to formally exit from the amalgamation agreement.
One of the main reasons behind the $10 billion deal being derailed was the lack of consensus over who would head the merged entity, reports said. While ZEEL MD and CEO Punit Goenka earlier agreed upon as the candidate to be at the helm of the merged company, Sony reportedly sought a reconsideration after Goenka came under a SEBI probe.
As per the terms of the merger, the deal was to be completed by December 21. However, the lack of consensus pushed the amalgamation into a month-long grace period, which ended on January 21.
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"Sony Pictures Networks India Private Ltd (SPNI) has been engaged in discussions in good faith to extend the End Date, but the Discussion Period has expired without an agreement upon an extension of the End Date. As a result, on January 22, 2024, SPNI issued a notice to ZEEL terminating the definitive agreements," the Indian arm of the Japanese media major said in a 62-page termination letter.
Here's a timeline of Zee-Sony's failed merger:
September 2021: ZEEL's board of directors gave an in-principle approval for the merger with Sony.
December 2021: Following a 90-day due diligence period, the two companies signed the merger deal, which stated that the amalgamation had to be brought into effect in two years.
February 2022: One of the first legal roadblocks to the merger emerged, as the IndusInd Bank moved the Mumbai bench of the National Company Law Appellate Tribunal (NCLAT) to initiate insolvency proceedings against Zee. The lender, in its petition, claimed that the Mumbai-based media company defaulted dues amounting to Rs 83.08 crore.
July 2022: The BSE and the National Stock Exchange (NSE), the two main bourses, approved the proposed merger of ZEEL with Sony.
October 2022: The Competition Commission of India (CCI), the country’s anti-trust regulator, gave its nod to the proposed merger with certain modifications.
December 2022: On December 15, IDBI Bank filed a plea before the National Company Law Tribunal (NCLT) against ZEEL, seeking an insolvency proceeding to recover dues of Rs 149.60 crore.
March 2023: ZEEL settled its payment dispute with IndusInd Bank, with both parties informing NCLAT about the resolution.
May 2023: An earlier order of NCLT that directed the stock exchanges to review their earlier approval for the merger was put aside by the NCLAT.
June 2023: Punit Goenka and his father, ZEEL founder Subhash Chandra, came under the Securities Exchange Board of India's radar, with the market regulator barring them from holding any managerial or directorial roles.
August 2023: The Mumbai-bench of NCLT approved the merger between ZEEL and Sony.
September 2023: Axis Finance filed an appeal in NCLAT against approval given by the NCLT to the Zee-Sony merger.
October 2023: The ban imposed on Punit Goenka from holding any directorial position by the SEBI was lifted by the Securities Appellate Tribunal (SAT). The regulatory body's probe against him, however, continues.
November 2023: With the SEBI probe underway against Goenka, Sony reportedly sought an agreement over the appointment of its managing director NP Singh as the head of the proposed merged entity.
December 2023: The deadline for the completion of the merger lapsed on December 21. Zee and Sony issued statements that confirmed that both sides were locked in discussions over its completion.
January 2024: Sony issued the termination letter to formally scrap the proposed merger.
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