Zee, Sony in talks to extend merger deadline

By Kashish Tandon and VarunVyas Hebbalalu

BENGALURU (Reuters) -Zee Entertainment Enterprises said on Wednesday that it was in talks with Sony Group’s India unit about extending a merger deadline to create a $10 billion media and entertainment powerhouse.

The units of both companies have communicated the intention to be merged by entering into “good faith negotiations,” Zee said, as they seek to clear the uncertainty over the leadership of the combined entity.

The deal announced two years ago by Sony and Zee to merge their TV channels, streaming platforms and film assets has been delayed after India’s markets regulator in August barred Zee CEO Punit Goenka from directorships of any listed company.

An Indian tribunal, however, lifted the ban on Goenka, a CEO candidate for the merged entity, in October but had said he would have to cooperate with any investigation by the Securities and Exchange Board of India.

“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.

Goenka will not risk the merger being called off, on the brink of him becoming CEO, Taurani said.

The domestic media sector will likely consolidate further as Reliance Industries and Walt Disney chalk out plans to merge their entertainment operations in India.

Regulatory approvals and the relisting process for the Zee-Sony merger will take three to four months once the extension is granted, and the merged company is expected to be listed by March or April, Taurani said.

(Reporting by Varun Vyas and Kashish Tandon in Bengaluru; Editing by Anil D’Silva)