Sony says some conditions not met and seeks $90 million break-up fee.
Japanese Sony has terminated its merger agreement with Indian media group Zee Entertainment two years after signing it. Mumbai-based Zee categorically denied that it had breached the agreement.
The deal fell apart due to a stalemate over whether Zee’s Chief Executive Officer Punit Goenka would lead the merged entity amid an investigation by India’s capital markets regulator. Goenka was barred from holding managerial posts in Zee and any of the entities in a fund-diversion case. Sony insisted that he should not remain in his post after the merger.
The combined company was expected to own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India. Now, both Sony and Zee now have to redraw their plans for the world’s most-populous country.
Sony will not get access to Zee’s deep library of content in regional Indian languages and dozens of local television channels. Zee’s in precarious financial health and will facing growing competition, as Reliance Industries and Walt Disney Co. near their own merger.
Prior to the cancellation, the deal had already received regulatory approvals, including clearance from the Competition Commission of India (CCI), and was to be completed before December 21, 2023.
Source: Bloomberg
