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Zee, Sony engage in talks to extend merger deadline

Zee Entertainment Enterprises Ltd (ZEEL) has announced that Sony Pictures Networks India (now known as Culver Max Entertainment Private Limited)

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Zee, Sony engage in talks to extend merger deadline
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Zee Entertainment Enterprises Ltd (ZEEL) has announced that Sony Pictures Networks India (now known as Culver Max Entertainment Private Limited) has agreed to discuss extending the deadline for their merger. The merger, initially set to be completed by December 22, 2023, as per the agreement made in 2021, faced challenges due to differences over leadership roles in the combined entity.

Zee confirmed receiving communication from Sony expressing a willingness to negotiate "in good faith" with the aim of extending the deadline to make the merger scheme effective by a reasonable period. The extension, if agreed upon, would provide the necessary time to address issues and move forward with the amalgamation.

The analyst community views Sony's willingness to negotiate positively, as it ensures cooperation between the two parties involved. However, there had been concerns earlier when Sony refused to agree to the merger deadline extension, causing a decline in ZEEL shares.

If the extension is granted, the regulatory approvals from the Registrar of Companies (ROC), Ministry of Information and Broadcasting (MIB), and the relisting process are expected to take 3-4 months. As a result, the merged company is anticipated to be listed by March or April 2024.

Legal experts highlight that the effectiveness of the merger is contingent on various approvals, including those from the shareholders of the transferee and transferor companies, the appointment of key executives, and permissions from relevant authorities. Seeking an extension for the completion of these preconditions is common in significant mergers.

The Zee and Culver Max merger had previously faced a setback when Punit Goenka, who was spearheading the plan, had to step down as CEO due to a Securities and Exchange Board of India (Sebi) order. Zee has asserted that Punit Goenka will lead the combined entity, while Sony remains cautious due to the ongoing Sebi investigation against Goenka.

Overall, the decision to enter negotiations for a deadline extension reflects a commitment from both parties to work towards a successful merger, addressing challenges and regulatory requirements in the process.

ZEEL Sony Merger 
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