ZEEL requests Sony hasten merger date talks for consolidation
The scheduled closure of the Zee-Sony merger, as per the agreed-upon terms, is targeted for December 22, 2023, marking a significant milestone in their consolidation journey
Sumit Rawat
Zee Entertainment Enterprises Ltd (ZEEL) has formally requested Culver Max Entertainment Private Limited (CMEPL, previously Sony Pictures Networks India Pvt Ltd) for an extension in the completion timeline for their highly anticipated merger.
In a disclosure to the Bombay Stock Exchange, ZEEL stated, “In accordance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR Regulations’), we hereby announce that, as per the Merger Cooperation Agreement dated December 22, 2021, between the Company, BEPL (Bangla Entertainment Private Limited), and CMEPL, the Company has appealed to CMEPL and BEPL to extend the Scheme's effective date, as stipulated in the Merger Cooperation Agreement.”
Previously, industry insiders had speculated that the listing of the Zee-Sony merged entity, expected to create a $10 billion media and entertainment powerhouse, might occur in January of the following year, with the record date likely set by the end of November.
Experts addressing the merger delay noted that the extension in the timeline is not expected to encounter major regulatory hurdles, as NCLT approval is not constrained by time limits.
Karan Taurani, Senior Vice President at Elara Capital, mentioned, “The date extension is a mutual decision, subject to shareholder and Board approvals. Further appeals lodged by Axis and other lenders in NCLAT are unlikely to impede the merger, as NCLT approval stands without conditions.”
Previously, reports surfaced regarding turbulence in the merger process, with Sony issuing a statement concerning the delay.
Initially slated for completion by the end of September 2023, the merger deadline was subsequently extended to December 22 due to legal complexities involving Zee.
The merger journey commenced in December 2021, when ZEEL’s Board of Directors sanctioned and ratified the Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013. However, the process encountered hurdles as several ZEEL lenders raised objections.
On August 10, the National Company Law Tribunal (NCLT) dismissed all objections raised by the lenders, granting approval for the merger.
Industry analysts anticipate that the combined entities will possess a portfolio encompassing over 70 TV channels, two video streaming platforms (ZEE5 and Sony LIV), and film studios (ZEE Studios and Sony Pictures Films India), amounting to a 26% market share.
The merger is expected to grant ZEE and Sony access to an audience exceeding 700 million across television and digital platforms, consolidating their market presence and augmenting their share in the advertising domain.
