Sony Calls Off Merger Deal With Zee: Report
Japan”s Sony Group has reportedly sent a termination letter to Zee Entertainment, informing it of its plans to call off the merger deal between its India unit and the media network. Bloomberg reported on Monday that the Japanese entertainment giant has cited unmet conditions of the merger agreement as the reason for the termination of the deal.
The new development is set to end a two-year acquisition saga. However, both companies have not yet made any official statements on this matter. Bloomberg, citing sources, also reported that Sony is expected to disclose this termination of the $10 billion deal to the exchange later. On January 8, Bloomberg reported that Sony was planning to call off the merger with Zee. The report also said that Sony is making this move due to a standoff over whether Zee’s Chief Executive Officer, Punit Goenka, would lead the merged entity. Notably, Punit Goenka is under investigation by SEBI, the capital markets regulator.
On January 9, Zee said that it was committed to its merger with Sony”s local arm. On that occasion, Zee also said that the reports that Sony was planning to drop the deal were “baseless and factually incorrect.” Zee said that it continues to work towards closing the deal.
The significant merger between both the companies was supposed to be concluded by December 21, 2023. However, Zee requested an extension. Sony”s termination letter emerged after a 30-day grace period ended over the weekend. It is worth mentioning that the merger pact was signed in 2021. Karan Taurani, an analyst at Elara Capital, told Reuters that the deal collapse will have a negative impact on both parties.
