After two years of negotiations, Sony Group is known to have called off its $10 billion merger plans with Zee Entertainment Enterprises Limited on Monday (22 January), MoneyControl reported.
The Sony Group board held a meeting a few days ago to decide the future of the deal with Zee as the merger encountered multiple hurdles, including leadership disputes and unresolved issues.
Sony has officially notified Zee of termination in a letter, which is not disclosed to the public yet, and cited conditions of the merger agreement not being met as the reason. This leaves Zee vulnerable to competition as rivals bulk up.
As reported earlier, Sony was said to be uncomfortable with Punit Goenka leading the merged entity amid an ongoing regulatory probe. It was advocating for its Indian operations managing director, NP Singh, to be the top executive.
Two weeks ago, Zee Entertainment refuted media speculations of cancelling the merger with Sony Pictures' India division and said that the company is persistently striving for a successful conclusion of the proposed unification.
Sony sent the termination letter after the 30-day grace period ended over the weekend as the two sides could not reach an agreement on a deadline set for 20 December 2023.
It's also important to note that Zee's net profit has seen a decline since the merger announcement, dropping to Rs 48 crore in FY23 from Rs 956 crore in FY22 and Rs 793 crore in FY21.
Nishtha Anushree is Senior Sub-editor at Swarajya. She tweets at @nishthaanushree.
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