Sony has officially called off its merger plans with Zee Entertainment. This decision puts an end to the ambitious $10 billion venture aimed at establishing a major entertainment entity in India, the world’s rapidly growing economy.
Following weekend negotiations, Sony issued a termination notice to Zee, citing unmet conditions by the January 21 deadline. Leadership concerns proved a major sticking point, with Sony unwilling to retain Punit Goenka as CEO amidst ongoing regulatory investigations into alleged financial misconduct.
Beyond leadership, Sony also expressed concerns over Zee’s financial health, particularly its declining operating revenue and a significant drop in earnings in fiscal 2023. These financial woes were attributed to increased streaming costs and a weak advertising market.
Expressing disappointment, Sony stated that the necessary conditions for the merger weren’t met by the set deadline of January 21. However, Sony reaffirmed its commitment to expanding its presence in India.
Meanwhile, Zee disclosed that Sony had demanded a $90 million termination fee, citing alleged breaches of the merger terms. In response, Zee strongly denied these allegations and stated its readiness to take legal actions to defend its stakeholders’ interests.
The deal had been troubled from the start, marred by regulatory investigations into allegations of financial misconduct involving Goenka and his father, Subhash Chandra, the founder of Zee. Both have denied these allegations.
Sony had remained committed to the merger until recent developments. Despite the termination, the possibility of renegotiating the deal hasn’t been entirely ruled out.
Tensions escalated last month when Zee could not meet a December 21 deadline to finalize the deal, leading to further delays and boardroom changes.
While talks continued past the deadline, no resolution was reached. Despite the fallout, Zee’s share prices had risen by 35% since last June, fueled by optimism over the merger. However, market analysts caution that this uptrend could reverse with the deal’s collapse.
Related:
- PlayStation 5 Genshin Impact bundle launch date, content and pricing revealed
- Sony Announces New Color Options For The PS5 Slim
- Nubia Z60 Ultra Year of the Dragon Limited Edition Announced
- Watch OnePlus 12, Oneplus 12R global launch event here
- Get the Realme GT5 Pro phone on Giztop for $599
- Lenovo Legion Y700 2023: Save $100 on this 8-inch gaming Android tablet
- Xiaomi Band 8 Genshin Impact custom edion get a huge discount
