Zee plunges after Sony scraps merger

Shares of Indian broadcaster – Zee Entertainment Enterprises – are down 10% in the early trade.

This comes a day after Japan's Sony Group scrapped a $10 billion merger with the company, raising concerns about its survival in an increasingly competitive industry.

Sony Pictures Network India said on Sunday that it “issued a notice terminating the definitive agreements entered into by SPNI and Zee Entertainment Enterprises Ltd. (“ZEEL”) relating to the merger of ZEEL with and into SPNI (the “Merger”), which was previously announced on December 22, 2021.”

The $10 billion deal was called off over a standoff on whether Zee CEO Punit Goenka should lead the merged entity, according to reports. Both the entities had reached an agreement in 2021 to create India’s largest broadcast company.

The agreement reportedly stated that Punit Goenka would lead the merger entity. But, amid charges of siphoning the money, Sony didn’t want him to lead the merged entity, claimed reports. In June 2023, India’s market regulator Securities and Exchange Board of India (SEBI) had barred Punit Goneka and his father Subhash Chandra from holding any key positions in listed companies.

(Inputs from Reuters)