Sony informs Zee about its decision to terminate merger

Sony Group Corp. has formally communicated its decision to terminate the merger with Zee Entertainment Enterprises’ India unit. This marks the conclusion of a protracted two-year saga, potentially exposing Zee to heightened competition as competitors strengthen their positions.

“Culver Max Entertainment (CME) today issued notice to Zee Entertainment Enterprises Ltd. (ZEEL) terminating the agreement dated December 22, 2021, to merge ZEEL and CME. 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," the statement said.

"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."

Sony is expected to officially disclose this development to the exchange later. 

The decision comes in the wake of an impasse between the companies regarding the leadership of the merged entity, particularly concerning Zee's Chief Executive Officer Punit Goenka. The standoff intensified amidst an ongoing investigation into Goenka's conduct by India's capital markets regulator. This deadlock now appears to have derailed the deal, which aimed to create a formidable $10 billion media giant. The Zee-Sony entity would have been the country's fourth-largest media company after Google, Meta and Disney-Star.

Last week, Zee Entertainment Enterprises formally requested an extension to the merger deadline from Culver Max Entertainment.