Sony’s Headquarters in Tokyo. Photo: Collected
The $10 billion merger between Sony Group of Japan and Zee Entertainment, which was supposed to form one of South Asia's largest TV broadcasters, was canceled on Monday (22 January).
The deal's collapse in content-hungry as competition intensifies, India presents increasing uncertainty for TV broadcaster Zee in particular. Disney is also looking to combine its Indian operations with the media holdings of Reliance, owned by billionaire Mukesh Ambani.
Zee told Indian stock exchanges Sony was seeking $90 million in termination fees for alleged breaches of their merger agreement and emergency interim relief by "invoking arbitration". Zee said it denies all claims made by Sony and would take appropriate legal action.
Sony said in a statement certain "closing conditions" to the merger were not satisfied despite "good faith discussions" with Zee, and the companies had been unable to agree upon an extension by their Jan. 21 deadline.
"After more than two years of negotiations, we are extremely disappointed ... We remain committed to growing our presence in this vibrant and fast-growing market," it added.
While neither Sony nor Zee elaborated on Monday on which conditions had been unfulfilled, a stalemate over who will lead the combined company had put the merger in danger.
Zee had proposed that CEO Punit Goenka take the helm, but Sony balked after he became the subject of an investigation by India's market regulator. Zee said on Monday Goenka had been "agreeable to step down in the interest of the merger".
Messenger/Sun Yath
