Zee Entertainment Enterprises’ shares plunged more than 13% in the morning trade on Tuesday following a Bloomberg report suggesting that the Sony Group is planning to call off the $10 billion merger of its Indian unit with the firm.  

Shares of ZEE hit an intraday low of Rs 240.30, down 13.6% from the previous closing price on the National Stock Exchange (NSE). At 12:40 pm, the stock was trading 8.43% lower at Rs 254.70.

The Sony Group is considering scrapping the merger deal with Zee Entertainment due to a conflict over the leadership of the merged entity, Bloomberg reported, citing sources. 

Although the 2021 agreement indicated that ZEE’s chief executive officer (CEO), Punit Goenka, would lead the merged entity, Sony is reportedly reluctant to have him spearhead the new company amid an ongoing regulatory probe. 

The report added that Sony was planning to file a termination suit before January 20, the extended deadline for closing the deal, saying that some of its conditions had not been met. 

Negotiations were, however, still in progress, and the report said a resolution might emerge before the deadline. The merger deal has already received all regulatory approvals in India. If the merger materialises, Sony would hold a 50.8% stake, with the Goenka family retaining a 4% holding.