Zee Entertainment got a big blow, Sony canceled the merger, sent termination letter to the company
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ZEE-Sony Merger: Zee Entertainment has got a big shock today. Sony Group (Sony Group) has officially told Zee Entertainment Enterprises Limited that it is considering canceling the merger plan of its Indian unit. According to Bloomberg report, Japan’s leading entertainment company has sent a letter to Ji on Monday morning. It is expected that she will disclose this to the exchange later. Sony cited incomplete terms as the reason for ending the merger with Zee. The merger, announced two years ago, was approved by the Securities and Exchange Board of India (SEBI).SEBI) faced problems due to investigation. Let us tell you that the National Company Law Appellate Tribunal has filed a petition against the merger of both Axis Finance and IDBI Bank.NCLT) had complained. However, the tribunal had refused to stay the merger of the two companies. The reason for canceling the merger decision is said to be the delay in the deal. This matter is stuck for two years. This merger is said to be worth around $10 billion.
Why did Sony cancel the deal with Zee?
Sony cited incomplete terms as the reason for canceling the deal. According to the report, the merger is due to a standoff between the companies over the leadership of the property. The case specifically involves Zee CEO Punit Goenka, who is being investigated by capital markets regulator SEBI. The merger of the two companies was aimed at creating a $10 billion media powerhouse capable of competing with global giants like Netflix Inc and Amazon.com Inc.
Agreement on merger plan was reached in 2021
The agreement for the merger between Sony and ZEEL was signed in December 2021. Sony will indirectly hold the maximum stake of 50.86 percent in the newly formed giant media house. Whereas, Zee’s founders will hold 3.99 percent stake in the company. At the same time, Zee shareholders will hold 45.15 percent stake. It was expected to take 8 to 10 months to complete the merger process of both the companies in 2021. However, due to various reasons the merger could not be completed within the stipulated time. The reason for this is that many banks and financial institutions that had given loans to JI filed a petition against this merger.
How one company merges with another company
For a company to acquire another company (merger and acquisition), the two companies first negotiate. The boards of directors of both companies agree to an agreement to plan the acquisition. In this, details of acquisition, time limit, valuation of property, stock currency etc. are adjusted. Once the plan is made and agreed upon, Naubat (Form 23C and Form 1 Naubat) is issued. This includes the process and details of the acquisition. After issuing Naubat, it is presented to the Supreme Court or the Naubat Approval Officer. After receiving the approval, implementation of the acquisition is started as per the plan. In this, one company acquires control of the property, stock, and assets of another company. Following the acquisition, the various process, production, finance, and management systems of both companies are integrated. The various divided structures are transformed into a consolidated and organized structure.
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