(Image source from: Reuters)

The highly anticipated merger between Zee Entertainment and Sony's India arm may not proceed as planned, as Sony is reportedly considering issuing a termination notice before January 20. The merger, which was valued at $10 billion, aimed to create the largest media entity in India. However, Bloomberg reported that Sony no longer felt comfortable with Punit Goenka leading the merged entity due to an ongoing regulatory probe.

Despite the merger agreement being signed in 2021 and obtaining all necessary regulatory approvals, the process has faced several obstacles leading up to its deadline. Zee had requested an extension of the merger deadline beyond December 21 from Sony's Indian arm, Culver Max Entertainment, in order to ensure the scheme's effectiveness.

Another significant point of contention between the two companies has been the selection of the merged entity's leader. Reuters reported that while Sony pushed for NP Singh, its Indian operations managing director, to take on the top executive role, Zee advocated for Punit Goenka.

In June, the Securities and Exchange Board of India (SEBI) accused Goenka and Zee Group Chairman Subhash Chandra of misusing company funds. However, in October, the Securities Appellate Tribunal lifted the ban on Goenka, allowing him to hold board positions in Zee Group companies.

Under the proposed merger, Culver Max Entertainment (previously known as Sony Pictures Networks India) and Zee Entertainment were to combine their linear networks, digital assets, production operations, and program libraries. The merged entity would have owned more than 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), establishing itself as the largest entertainment network in India. In December, the companies announced the signing of a definitive agreement for the merger.