Big News: Sony Aborts Merger With Zee

Japan’s Sony Group has officially terminated the proposed merger with Zee Entertainment Enterprises on 22 January.

In an official statement, Sony Pictures Entertainment mentions, “Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline.  After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date.

We remain committed to growing our presence in this vibrant and fast-growing market and delivering world-class entertainment to Indian audiences.”

The termination letter, sent to Zee on Monday, has been disclosed to the exchange as well.

The decision follows the expiration of a 30-day grace period over the weekend, during which the two parties were unable to reach an agreement on a deadline set in late December. Reports on 19 January had already indicated that Sony was planning to abandon the USD 10-billion merger, which had been under negotiation for over two years. 

The breakdown of the deal can be attributed to the inability of the media giants to agree on leadership for the combined entity. Specifically, Sony was reluctant to have Punit Goenka from Zee at the helm. Talks had initially stalled on 10 November when Sony insisted that its executive lead the merged company instead of Goenka. The failure to reach an agreement by the extended deadline of 21 December ultimately derailed the merger. 

According to sources with direct knowledge of the developments, Sony's stance is firm, stating that they cannot allow Punit to be the CEO of the merged company or even hold a board seat, as he is currently under investigation for alleged diversion of funds. After two years of negotiations, numerous meetings, and late-night calls, the proposed merger has officially come to an end.