$10 billion Sony-Zee merger likely to be called of: Reports

Amid the standoff over Zee chief executive officer Punit Goenka insisting on heading the merged Sony-Zee entity, Sony Group Corp. is looking at scraping the 10 billion merger deal.

In September 2021, Sony Pictures Networks India and ZEEL had entered into a non-binding term sheet to bring together their linear networks, digital assets, production operations and programme libraries. The combined entity would have owned over 70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India.

However, according to a Bloomberg report, Sony does not want Goenka to head the company after a regulatory probe against him.

The two companies had agreed that Goenka would head the merged entity. However, Sony is not keen to have him at the helm. In 2023, Securities and Exchange Board of India (Sebi) had barred Essel Group chairman Subhash Chandra and Punit Goenka from holding the position of a director or key managerial personnel in any listed company. The action was initiated after they were found diverting funds from the company. The duo had moved Securities Appellate Tribunal (SAT) against the regulator's interim order, and got it quashed.

A Reuters report had earlier said Sony wants its Indian operations managing director N.P. Singh to head the merged entity.

Sony intends to file the notice to terminate the agreement before the January 20 deadline to close the merger deal, Bloomberg quoted an unnamed source as saying. The Japanese conglomerate is likely to cancel the deal saying certain conditions necessary for the merger were not met.

Both companies are yet to come out with clarifications on the report.