According to a news agency, Sony Group Corporation has officially informed Zee Entertainment Enterprises Ltd that it plans to cancel the $10 billion merger between its Indian unit and the media network. bloomberg Report on Monday, January 22. This ends a two-year acquisition saga.
“The Japanese entertainment giant sent a termination letter to Zee on Monday (January 22) morning and is expected to disclose the same to the exchange later.” bloomberg The report cited people familiar with the plan.
The deal was considered vital to the companies’ survival in a highly competitive market, given the impending merger between Disney’s Indian businesses and the media properties of billionaire Mukesh Ambani’s Reliance Industries.
Bloomberg News had reported earlier on Monday that Sony cited incomplete terms of the merger agreement as the reason for the termination in a letter sent to Zee on Monday morning.
The company is expected to disclose the letter to the exchange at a later date, the report said.
Sony declined to comment, while Zee did not immediately respond to Reuters’ request for comment.
The merger, announced more than two years ago, has hit a standoff over who will lead the combined company. Zee proposed CEO Punit Goenka, but Sony disagreed in light of Goenka’s market regulator investigation.
On Friday, Zee had said it was committed to the merger and was working to complete the deal through “good-faith negotiations”. He wanted to discuss extending the January 20 deadline to complete the deal.
Karan said, “The collapse of the deal will have a negative impact on both parties as they look to expand in the Indian market, which is undergoing digital disruption and there is a potential risk of increased intensity of competition if the Reliance-Disney deal goes through. ” Taurani, an analyst at Elara Capital.
Zee is also grappling with declining profits, advertising revenue and cash reserves in a market where global streaming giants like Netflix and Amazon.com are also battling for share.
Analysts say if the deal collapses, Zee’s four-year deal with Disney Star for TV broadcast rights of some cricket events will also be in jeopardy, as Zee will earn between $1.32 billion and $1.44 billion during the term of the agreement. Dollars have to be paid.
Bloomberg News reported on January 9 that the broadcaster missed an early January deadline to pay the $200 million.
Shares of Zee closed 1.5% lower in Saturday’s trading session in Mumbai. The market is closed on Monday due to public holiday in the state of Maharashtra.
(with inputs from agencies)
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