Sony Group officially terminated the proposed $10 billion merger deal with Zee Entertainment Enterprises (Zee), concluding a lengthy two-year acquisition process, as Bloomberg News reported. Sony conveyed the decision through a termination letter sent to Zee after a crucial meeting on Friday failed to resolve the impasse.
Sources familiar with the matter, requesting anonymity, disclosed that Sony is expected to officially announce the termination notice shortly. According to details in the termination letter reviewed by Bloomberg, Sony cited unmet conditions outlined in the merger agreement as the reason for terminating the deal.
The extended deadlock between the two companies centered around leadership disputes for the merged entity. The disagreement primarily revolved around the role of Punit Goenka, Zee’s Chief Executive Officer, in the combined company. The ongoing regulatory investigation into Goenka’s conduct by the Securities and Exchange Board of India (SEBI) added complexity to the leadership standoff.
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Sony’s decision to terminate the deal marks the end of the potential creation of a formidable $10 billion media conglomerate capable of competing against global streaming giants like Netflix Inc. and Amazon.com Inc.
The termination notice from Sony came after the expiration of a 30-day grace period, during which the two parties failed to reach a consensus on the deadline set in late December. Neither party has issued official statements regarding the reports of the merger deal being called off.
Initial reports on January 8 hinted at Sony’s intention to abandon the merger due to the unresolved leadership dispute. Despite subsequent statements from Zee suggesting ongoing negotiations, the termination notice solidifies the conclusion of this high-stakes corporate drama.
The primary sticking point in the negotiations was Zee’s insistence on Punit Goenka leading the new entity, in line with the terms agreed upon in the 2021 pact. However, Sony expressed reservations due to the regulatory scrutiny surrounding Goenka.
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