No deal: Sony sends termination letter to Zee over India merger - Hindustan Times

Sony calls off merger of its India unit with Zee Entertainment

Jan 22, 2024 11:00 AM IST

Sony cited unmet conditions as the reason for terminating the merger with Zee

Sony Group Corp. has formally communicated to Zee Entertainment Enterprises Ltd. its decision to cancel the merger with its India unit.

 Zee Entertainment and SONY (REUTERS)
Zee Entertainment and SONY (REUTERS)

The Japanese entertainment giant sent a termination letter to Zee early on Monday and is expected to disclose it to the exchange later. Sony cited unmet conditions as the reason for terminating the merger with Zee.

HT launches Crick-it, a one stop destination to catch Cricket, anytime, anywhere. Explore now!

Sony, in a statement, said, “The Merger did not close by the End Date as, among other things, the closing conditions to the Merger were not satisfied by then. Sony Pictures Networks India Private Ltd (SPNI) has been engaged in discussions in good faith to extend the End Date but the Discussion Period has expired without an agreement upon an extension of the End Date. As a result, on January 22, 2024, SPNI issued a notice to ZEEL terminating the definitive agreements."

The merger, announced over two years ago, faced challenges concerning the leadership of the combined entity, exacerbated by the Securities and Exchange Board of India (SEBI) probe into Zee chief executive officer Punit Goenka.

Why did Sony call off the $10 billion merger deal with Zee?

The termination stems from a deadlock between the companies regarding the leadership of the merged entity, particularly involving Zee's CEO Punit Goenka, who is under investigation by capital markets regulator SEBI. This impasse has effectively derailed the deal, which aimed to establish a $10 billion media powerhouse capable of competing with global giants like Netflix Inc. and Inc.

ALSO READ- Zee shares plunge 14% as Sony plans to call off proposed merger

Sony's termination letter follows the expiration of a 30-day grace period over the weekend. During this period, the two parties failed to reach an agreement on a deadline set in late December.

In June, SEBI accused the Mumbai-based media house of fabricating the recovery of loans to conceal private financing deals by its founder, Subhash Chandra. SEBI's interim order stated that Chandra and his son, Goenka, "abused their position" and diverted funds.

ALSO READ- Subhash Chandra, Punit Goenka barred from holding directorial positions: SEBI interim order

Although Goenka obtained relief from an appellate authority against the SEBI order, which barred him from holding an executive or director position in a listed company, Sony continued to perceive the ongoing probe as a looming corporate governance concern.

(Inputs from agencies)

Discover the complete story of India's general elections on our exclusive Elections Product! Access all the content absolutely free on the HT App. Download now!
Stay informed on Business News, TCS Q4 Results Live, Jio Financial Services Q4 Results Live along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
Share this article

    Follow the latest breaking news and developments from India and around the world with Hindustan Times' newsdesk. From politics and policies to the economy and the environment, from local issues to national events and global affairs, we've got you covered.

Story Saved
Live Score
Saved Articles
My Reads
Sign out
New Delhi 0C
Monday, April 22, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On