More than two years of negotiations failed to seal the Sony Group Corporation’s merger in India with Zee Enterprises. The Sony Group said the closing conditions of the merger were not satisfied. It officially terminated the $10 billion mega-merger deal with the Indian giant.
Sony Pictures Entertainment said Culver Max Entertainment (CME), its Indian unit, issued notice to Zee Entertainment Enterprises Ltd (ZEEL) terminating the agreement dated December 22, 2021, to merge ZEEL and CME.
“Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline. After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date.”
ZEEL said Sony is seeking a termination fee of $90 million in regards to alleged breaches by the Indian company. “ZEEL categorically denies all the assertions raised by Culver Max and BEPL on the alleged breaches under the terms of the MCA, including their claims for the termination fee. ZEEL’s Board of Directors is evaluating all the available options.”
It added that ZEEL displayed the utmost commitment towards the merger by undertaking several permanent and irreversible steps, resulting in one-time and recurring costs for ZEEL. “The company will continue to evaluate organic and inorganic opportunities for growth, leveraging the intrinsic value of its assets.”
If the merger had gone ahead successfully, Sony would have held a 53 percent stake in the merged media and entertainment company. The merger would have put more than 70 linear TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India) under a single roof – making it the largest player in India’s linear TV market. This would have significantly boosted Sony’s position in the Indian streaming sector.