Sony orders the termination of the $10 billion Indian merger with Zee

Sony called off the merger between its India unit and Zee Entertainment on Monday, ending a two-year acquisition deliberation that would have created a $10 billion media powerhouse in the South Asian market. Sony said in a statement that it has sent a termination letter to Zee after the Indian firm failed to meet the conditions, despite a 30-day extension. Sony also sought for Zee to improve its finances, something that has only grown worse in recent quarters. The deal would have created a $10 billion media powerhouse in India, where billionaire Mukesh Ambani is increasingly flexing his wealth and reach. Zee and Sony have been important fixtures in the Indian TV industry for the last 25 years.

Sony has announced the end of their two-year acquisition deliberation with Zee Entertainment, calling off the highly anticipated merger between their India units. The decision has been made after Zee failed to meet agreed upon conditions, even with a 30-day extension.

Sony said it was “extremely disappointed” that the Indian firm did not meet the conditions set for the merger.

In a statement, Sony explained that termination of the deal was a result of Zee’s inability to meet closing conditions within the specified time frame.

One of the major points of contention in the merger negotiations was the future leadership of the combined entity. Sony Pictures Networks India, the Japanese conglomerate’s wholly-owned Indian arm, was pushing for Zee’s CEO, Punit Goenka, to step down after the merger. However, Goenka resisted for months before reports emerged last week that he may agree to the terms.

Sony also requested that Zee improve its financial standing, which has only worsened in recent quarters. The two companies initially announced their intent to merge back in September 2021, with the combined entity expected to be valued at $10 billion. This would have created a major media powerhouse in India, where billionaire Mukesh Ambani has been making major moves in the market.

Ambani’s company, Reliance, is currently in advanced talks to acquire a 51% stake in Disney’s Indian business, including the popular streaming service Hotstar.

“I resolve to move ahead positively and work towards strengthening Bharat’s pioneering M&E Company, for all its stakeholders,” Goenka said in a tweet on Monday.

For the past 25 years, Zee and Sony have been integral players in the Indian TV industry. Sony launched their Indian arm, Sony Entertainment Television, in 1995 and has been responsible for classic shows such as “Indian Idol” and “Kaun Banega Crorepati,” the Hindi adaptation of “Who Wants to be a Millionaire?”

The two companies also offer on-demand streaming services, competing with other major players like Netflix, Amazon Prime Video, Disney’s Hotstar, and Ambani’s JioCinema.

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Kira Kim

Kira Kim is a science journalist with a background in biology and a passion for environmental issues. She is known for her clear and concise writing, as well as her ability to bring complex scientific concepts to life for a general audience.

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