Sony has decided to abandon the highly anticipated $10 billion merger with Zee Entertainment, as Zee failed to meet specific financial terms outlined in the deal, according to a termination notice scrutinized by Reuters. The termination notice revealed that Zee did not fulfill certain cash availability thresholds, and Sony cited a “lack of commercial prudence” on the part of the Indian network as contributing factors to the dissolution of the merger.
In response to Sony’s claims, Zee Entertainment denied the allegations in a letter to Sony, accusing the Japanese company of acting in “bad faith” by calling off the merger. This unexpected turn of events has left both companies in a contentious position.
The proposed merger between Zee and Sony in India aimed to create a media powerhouse, boasting over 90 channels spanning sports, entertainment, and news, making it a significant player in the world’s most populous nation. However, after two years of negotiations, Sony officially terminated the plans on January 22, citing unmet “closing conditions.”
While Sony and Zee have not disclosed the details of the termination notice publicly, the document reviewed by Reuters highlighted Sony’s dissatisfaction with Zee’s failure to make “commercially reasonable” efforts to meet financial thresholds. The termination notice particularly emphasized issues related to cash availability.
As the fallout between the two entertainment giants continues, the industry watches closely, anticipating the potential ripple effects on the media landscape in India and beyond.