Zee Entertainment has denied recent media reports circulating about the purported termination of the much-anticipated $10 billion merger with Sony Pictures' India division. In a definitive statement released on Tuesday through a stock exchange filing, the Puneet Goenka-led company dismissed these assertions, labelling them as baseless and factually inaccurate.
The company went on to reaffirm its steadfast commitment to the merger with Sony, emphasizing its ongoing efforts toward achieving a successful conclusion to the proposed amalgamation.
This clarification swiftly influenced the stock market, initially witnessing a 10% decline at the opening bell, which later subsided to a decrease of around 7% by 3:30 pm.
Initially announced two years ago, the merger aimed to forge India’s largest broadcast company, intending to combine the expansive resources of both entities. However, complications arose in meeting certain conditions preceding the merger, fostering discontentment between the involved parties.
Issues surrounding the appointment of ZEEL MD Punit Goenka as the CEO of the merged entity persisted due to allegations of financial irregularities. The Securities and Exchange Board of India (SEBI) in June implicated Goenka and Zee Group Chairman Subhash Chandra in the diversion of company funds. While the Securities Appellate Tribunal lifted the ban on Goenka in October, concerns surrounding his leadership role lingered.
The Goenka family, possessing a 3.99% equity stake in ZEEL, further contributed to the intricate dynamics of this merger saga.
Anticipated to encompass over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), the combined entity aimed to dominate India's entertainment landscape. The merger agreement was solidified in December of the preceding year.
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