Sony calls off merger with Zee as agreement talks fail: Report

Sony calls off merger with Zee as agreement talks fail: Report

Sony Group Corp has officially communicated its decision to call off the merger to Zee Entertainment Enterprises Ltd (ZEEL), a Bloomberg report said on Monday. The Japanese entertainment giant is expected to disclose the same in an official meeting later in the day.

Sony, in its letter to Zee, has cited unfulfillment of agreement conditions as the reason for this termination. The deal termination letter comes after a 30-day grace period ended last week without any agreement on the deadline set in December 2023.

Bloomberg had reported the termination in talks on January 8. However, the Japanese conglomerate said the companies are still in talks for the merger. The Mint, in a report last November, said that talks have stalled between the duo over leadership issues.

Announced more than two years back, the proposed $10 billion merger faced several regulatory hurdles from market watchdog Sebi. The market regulator was concerned regarding the leadership of the combined entity by Zee’s Chief Executive Officer Punit Goenka.

Media reports added that Zee is still pushing for Goenka as the head of the combined entity, as agreed by the two companies in the 2021 pact. Sony is wary of Goenka’s appointment because of an ongoing regulatory probe.

Sony’s move is expected to leave Zee vulnerable amid rising challenges in the entertainment space. The merger would have created a media giant big enough to take on global powerhouses like Netflix and Amazon.

Shares of ZEEL traded 3.60 points, or 1.53 per cent lower at 231.40 mark at 11.20 am.

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