Sony Group Corp. has formally informed Zee Entertainment Enterprises Ltd. of its intention to cancel the merger between its India unit and the media network, bringing an end to a two-year acquisition saga.
The halted merger, if successful, would have resulted in a $10B media powerhouse capable of competing with global giants Netflix Inc. and Amazon.com Inc.
On Monday, Sony dispatched a termination letter to Zee and is expected to publicly disclose it to the exchange, citing unmet conditions of the merger agreement as the reason for termination, according to sources cited by Bloomberg.
The termination comes after a deadlock between the companies regarding the leadership of the merged entity, particularly whether Zee’s Chief Executive Officer Punit Goenka, facing an investigation by India’s capital markets regulator, would lead the combined venture.
The deal’s collapse follows the conclusion of a 30-day grace period over the weekend, during which the two sides failed to reach an agreement on the deadline set in late December.
A Sony spokeswoman declined to comment, and a representative for Zee did not immediately respond to requests for comments, according to Arabian Business.
Earlier this month, Bloomberg News had already reported Sony’s intention to call off the merger due to the inability to resolve the leadership dispute.
Despite Zee’s later statement that they were still in talks to complete the merger, the last-minute struggle over leadership proved to be the decisive obstacle, with Zee insisting on Goenka leading the new entity, as agreed in the 2021 pact, while Sony expressed concerns given the ongoing regulatory probe against him.