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South Gate Entertainment and Shapiro Glickenhaus Entertainment are in “serious discussions” about merging their domestic homevideo sales and marketing operations, according to sources.

However, the companies’ boards of directors and attorneys reportedly have not yet approved the deal. If greenlighted, the deal will be clinched before the end of the month.

As proposed, the indies’ production, acquisitions and foreign sales operations would remain separate.

Many questions remain about the proposed merger, including who from the two companies’ seasoned staffs will administer sales and marketing.

One candidate, Shapiro Glickenhaus’ Pete Pidutti, senior v.p. and g.m. of homevid, removed himself from the running when he resigned earlier this month; Pidutti explained, “I wasn’t interested in being part of the joint venture.”

Shapiro Glickenhaus started its vid unit in summer ’89, bringing aboard Pidutti and Andi Elliott from Celebrity Home Entertainment.

South Gate, which has been partnered with Japanese publishing company JICC since last summer, was founded in January ’89 by Yoram Pelman.