Sony, Zee have one-month grace period to complete $10 billion merger

By P R Sanjai and Debjit Chakraborty

Sony Group Corp. and Zee Entertainment Enterprises Ltd. have a one-month grace period starting Thursday to close the merger of their India operations that will create a $10 billion media behemoth, according to people familiar with the matter.

A 30-day period after the Dec. 21 deadline was included in the merger pact signed in 2021 if either party sought more time, said people familiar with the discussions who didn’t want to be identified as the information is private. Zee is hopeful of tying up loose ends before the grace period is over, they said.

Mumbai-based Zee, however, requested for an extension in a Dec. 17 filing, without specifying how much time it was seeking. Sony said Tuesday that it wanted to hear Zee’s proposals on completing the “remaining critical closing conditions.” Zee, in another exchange filing Wednesday, said that Sony has communicated its intent to “enter into good faith negotiations” on this issue.   

The grace period, as well as the talks on a further deadline extension, are keeping hopes alive for a two-year-old transaction that has already seen ample drama and delays. It seemed on the brink of collapse as differences cropped up between the two sides on who’ll lead the new merged entity, Bloomberg reported last month.

Sony-Zee Merger Risks Collapse Ahead of Deadline Over CEO Drama

Zee was insisting that its Chief Executive Officer Punit Goenka will helm the new media giant, as agreed in the 2021 pact, while Sony was wary of his appointment given an ongoing regulatory probe against Goenka. 

Sony Pictures Networks India Pvt. will own a 50.86% stake in the new entity, while Zee founders will own 3.99%, with public shareholders owning the rest, according to merger deal terms disclosed in the past.