Sony has terminated plans for its long-in-the-works merger of its television and streaming operations in India with local giant Zee Entertainment Enterprises, saying that closing conditions were not satisfied.
The $10 billion tie up has been in the offing for more than two years, but had hit several regulatory roadblocks before the National Company Law Tribunal cleared the deal in August. Just last week, Zee said it was continuing to work towards a successful closure of the deal with Culver Max Entertainment, formerly known as Sony Pictures Networks India.
However, today, Sony sent notification that it was terminating the merger agreement. In a statement, the company said, “Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline. After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date. We remain committed to growing our presence in this vibrant and fast-growing market and delivering world-class entertainment to Indian audiences.”
The merger would have created an Indian media giant, bringing together the two companies’ linear TV networks, digital assets, production operations and program libraries. Sony was to provide a large cash injection and control a majority share stake of close to 51%.
Earlier this month, Bloomberg had reported that Sony was looking to call off the merger as the two sides were unable to decide on leadership of the combined group.
According to Reuters, the deal was perceived as crucial for the survival of the companies in a very competitive market, especially amid the impending merger between Disney’s Indian businesses and the media assets of Mukesh Ambani’s Reliance Industries.
Sony also noted it does not anticipate the termination of the merger to have any material impact on its consolidated financial results as it has not previously included the deal in its forecasts for the fiscal year.