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Business News/ Companies / Sony Group terminates merger with Zee Entertainment
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Sony Group terminates merger with Zee Entertainment

Sony Group Corp has sent a termination letter to Zee Entertainment Enterprises Ltd, ending the proposed merger between their India unit and the media network.

Zee Entertainment and SONY logos are displayed in this illustration (File Image: Reuters)Premium
Zee Entertainment and SONY logos are displayed in this illustration (File Image: Reuters)

Japan's Sony Group Corp has sent a termination letter to Zee Entertainment Enterprises Ltd (ZEEL), citing its plans to call off the merger between its India unit and the media network. 

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 termination letter was sent to Zee early on Monday

Sony also said, “The definitive agreements provided that if the Merger did not close by the date twenty-four months after their signature date (the “End Date"), the parties would be required to discuss in good faith an extension of the End Date required to make the Merger effective by a reasonable period of time." 

The termination letter from Sony also came after a 30-day grace period ended over the weekend when the two sides couldn’t reach an agreement on a deadline set in late December.

Sony said, “Such discussions were required to be held for a period ending thirty days after the End Date (the “Discussion Period"). The definitive agreements further provided that if the parties are unable to agree upon such an extension by the end of the Discussion Period, any party could terminate the definitive agreements by providing written notice."

Earlier on 19 January, it was reported that Sony is set to pull the plug on the proposed $10-billion merger of its India unit with Zee Entertainment after more than two years of negotiations. 

The deal unravelled as the media giants failed to agree on who would lead the combined entity, with the Japanese conglomerate disinclined to have Zee’s Punit Goenka at the helm, said two people with direct knowledge of the developments.

On 10 November, Mint was the first to report that the talks had stalled after Sony’s demand that its executive lead the merged entity instead of Goenka, and that failure to reach an agreement by 21 December could derail the merger. The two companies extended the deadline by a month but failed to iron out their differences.

“It’s over," said the second person aware of the developments. “After two years and multiple meetings and late-night calls, there is absolutely no meeting of minds anymore in this proposed merger. Sony stands resolute that they can’t allow Punit to be the CEO of the merged company or even a board seat as he is under investigation for alleged diversion of funds."

 

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Published: 22 Jan 2024, 09:08 AM IST
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