Mumbai, India: Sony has officially called off the $10 billion merger with Zee, ending a two-year-long deadlock, according to Bloomberg reports.
The termination was confirmed by Sony in a letter sent to Zee early Monday, and the company is expected to make a formal disclosure to the exchange. The primary reason cited by Sony for scrapping the deal is the failure to meet the “conditions of the merger agreement.”
This decision comes after an extended stalemate between the two companies, revolving around the leadership of the merged entity. The uncertainty regarding whether Zee’s Chief Executive Officer, Punit Goenka, would lead the combined company amid an ongoing probe by the Securities and Exchange Board of India (SEBI) into his conduct has been a significant point of contention.
The terminated deal would have created a $10 billion media giant, providing substantial financial strength to compete with global streaming giants like Netflix Inc. and Amazon.com Inc. However, the deadlock and lack of agreement during the 30-day grace period, which concluded over the weekend, have led to the collapse of the merger plan.
The merger agreement, initiated two years ago, aimed to form a media powerhouse with extensive viewership and pricing influence in a country with a population exceeding 1.4 billion.
The breakdown of the deal now leaves both Sony and Zee in a potentially vulnerable position, especially as billionaire Mukesh Ambani-led Reliance Industries Ltd. is in negotiations for a merger with Walt Disney Co.’s India unit.