Sony Group Corp was supposed to hold a board meeting on Friday (19th January) to make a vital decision about its $10 billion merger with Zee Entertainment Enterprises in India. On Monday 22nd January, The Japanese entertainment giant sent a termination letter to zee and is expected to disclose it to the exchange later, said people familiar with the plan, who asked not to be identified as the announcement is not yet public.
As reported by Bloomberg, Sony cited that the conditions of the merger agreement not being met as per the discussion and that is the reason of their termination. The termination comes after a deadlock between the companies regarding whether Zee's CEO Punit Goenka would lead the combined entity amid an inquiry into his behavior by India's capital markets regulator. The standoff seems to have now derailed the deal, which aimed to form a $10 billion media giant capable of competing with global leaders like Netflix Inc. and Amazon.com Inc.
Sony sent a termination letter to Zee after a 30-day grace period passed without an agreement on a deadline set in late December. A Sony spokeswoman declined to comment, and a representative for Zee did not immediately respond to a request for comment. Bloomberg News reported on Jan. 8 that Sony planned to call off the merger due to the failure to resolve a leadership dispute. Zee later stated that they were still in talks to complete the merger. The main point of contention was a leadership dispute, with Zee insisting that Goenka would lead the new entity as agreed in the 2021 pact, while Sony was wary of his appointment given a regulatory probe against him.