Sony Ends $10 Billion Merger With India Media Giant Zee (reuters.com) 3
Sony has scrapped plans for a $10 billion merger of its Indian unit with Zee Entertainment, "ending a deal that could have created one of the South Asian nation's biggest TV broadcasters," reports Reuters. From the report: The collapse of the deal in content-hungry India creates more uncertainty for TV broadcaster Zee in particular as competition heats up, with Disney, also seeking to merge its Indian businesses with the media assets of billionaire Mukesh Ambani's Reliance. Zee told Indian stock exchanges Sony was seeking $90 million in termination fees for alleged breaches of their merger agreement and emergency interim relief by "invoking arbitration." Zee said it denies all claims made by Sony and would take appropriate legal action. Sony said in a statement certain "closing conditions" to the merger were not satisfied despite "good faith discussions" with Zee, and the companies had been unable to agree upon an extension by their Jan. 21 deadline.
"After more than two years of negotiations, we are extremely disappointed ... We remain committed to growing our presence in this vibrant and fast-growing market," it added. While neither Sony nor Zee elaborated on Monday on which conditions had been unfulfilled, a stalemate over who will lead the combined company had put the merger in danger. Zee had proposed that CEO Punit Goenka take the helm, but Sony balked after he became the subject of an investigation by India's market regulator. Zee said on Monday Goenka had been "agreeable to step down in the interest of the merger." A source with direct knowledge however said Sony was not keen to proceed unless Goenka backed out before the closure of the merger, rather than after the deal had been sealed as he had proposed.
"After more than two years of negotiations, we are extremely disappointed ... We remain committed to growing our presence in this vibrant and fast-growing market," it added. While neither Sony nor Zee elaborated on Monday on which conditions had been unfulfilled, a stalemate over who will lead the combined company had put the merger in danger. Zee had proposed that CEO Punit Goenka take the helm, but Sony balked after he became the subject of an investigation by India's market regulator. Zee said on Monday Goenka had been "agreeable to step down in the interest of the merger." A source with direct knowledge however said Sony was not keen to proceed unless Goenka backed out before the closure of the merger, rather than after the deal had been sealed as he had proposed.
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