Sony Group has announced that it has called off its two-year-old merger talks with Mumbai-based Zee Entertainment, which would have created a $10bn media entity in India. The deal would have given Sony increased means to challenge both homegrown and global rivals, including Amazon and Netflix.
According to Sony, “the closing conditions to the merger were not satisfied,” without further details being provided. Reports suggest the two companies disagreed over the proposed leadership of the merged entity.
Zee had suggested its CEO, Punit Goenka, lead the merged entity, however, Sony rejected that suggestion, amid suggestions Goenka was being investigated by India’s market regulator.
In a statement, Zee said that Sony was pursuing a termination fee of $90m “on account of alleged breaches” in the merger terms and, according to the company, “categorically denies all the assertions.” Zee is still evaluating available options.
India enjoys a relatively free market, and its vast English-speaking population makes it attractive for global entertainment companies. Its government anticipates India will soon become the world’s third-largest media and entertainment market, rising from the current fifth.
Meanwhile, Disney and Mukesh Ambani’s Reliance Industries are considering combining their India media businesses. Competition in India’s entertainment industry is increasing, despite the damage wrought on the sector by the pandemic.
