The highly anticipated merger between Sony Group’s India unit and Zee Entertainment, based in Mumbai, has been officially called off, as announced by Sony on Monday. This development marks the end of a dramatic acquisition saga that began two years ago, intending to create a formidable $10 billion media entity in India. The merged company aimed to compete with both domestic rivals and global streaming giants such as Netflix and Amazon.
Sony cited that the “closing conditions to the merger were not satisfied,” without specifying the exact unmet conditions. Media reports suggest that tensions between the two companies arose over the leadership structure of the combined entity. Zee had proposed its CEO, Punit Goenka, to lead the merged company, but Sony disagreed, possibly due to an ongoing probe by India’s market regulator into Goenka.
In response to the termination, Zee released a statement confirming that it is evaluating all available options. The company also revealed that Sony is seeking a termination fee of $90 million, alleging breaches by Zee of the merger terms. Zee vehemently denied all assertions, including the claims for the termination fee.
This development occurs amid discussions between Disney and Mukesh Ambani’s Reliance Industries about combining their respective Indian media businesses. With the termination of the Sony-Zee merger, competition is intensifying in India’s entertainment industry. India, with its vast English-speaking population and relatively free market, is an attractive destination for global entertainment companies. Prime Minister Narendra Modi’s government anticipates the nation becoming the world’s third-largest media and entertainment market, up from its current fifth position.
If the Disney-Reliance deal materializes, it would not only bolster the American company’s position in India but also create a massive entity boasting over 100 TV channels and two streaming platforms, adding to the dynamic landscape of the Indian entertainment industry.