Sony, Zee may give one last chance to save mega-merger

The current market reflects the weakness of the Zee stock, which has lost over 10% in past two trading days

- Anirudh Laskar & Gaurav Laghate

Facing a Thursday deadline to complete their $10-billion mega-merger that has plodded along for two years, Sony Pictures Entertainment and Zee Entertainment Enterprises Ltd have chosen to give themselves some more time, two persons directly aware of the matter said. The development comes after Sony and Zee failed to find common ground despite protracted discussions, securing regulatory approvals, and spending over ₹300 crore in merger-related expenses.

An agreement between Sony’s India business (Culver Max Entertainment Pvt. Ltd) and Subhash Chandra-founded Zee Entertainment Enterprises Ltd provides for giving extra time of 30 days, if the terms of the merger are not met by either party before the effective date. Mint has seen a copy of the document.

Emails sent to Sony and Zee remained unanswered till press time. However, in a late Wednesday evening filing to stock exchanges, Zee said it is in receipt of a communication from Sony that the latter wants to enter into "good faith" negotiations with a view to discuss the extension of the date to make the scheme effective by a reasonable period of time.

The fate of the country’s largest deal in the entertainment space now depends on the "negotiations and compromises" that Sony and Zee can agree upon to revive the merger talks, said the two persons cited above.