Sony withdraws India operations merger agreement with ZEE from NCLT

Sony has officially withdrawn its agreement to merge its India operations with Zee Entertainment Enterprises, marking the end of a two-year plan to create a $10 billion media giant. The withdrawal was made through court filings to India's National Company Law Tribunal, bringing closure to a saga marked by delays and drama, according to a Bloomberg report.

The termination notice was sent by Sony to Zee on Jan. 22, citing Zee's failure to meet the merger agreement conditions. Zee denied breaching the pact announced in December 2021. This development has left both companies vulnerable, especially as their rivals, Reliance Industries and Walt Disney Co., announced a merger of their India media businesses, creating a significant competitor in the market.

Sony will reassess its strategy in India as a result. Industry experts predict that the merger of Reliance and Disney will attract the interest of content creators and advertisers, posing a challenge for competitors like Zee. Furthermore, there are indications that Sony's local division and broadcaster Sun TV Networks are considering acquiring a substantial stake in Arha Media & Broadcasting. Nevertheless, Sony has refuted these rumors.

Meanwhile, India's market regulator has uncovered discrepancies of over $240 million in Zee's accounts. Zee has stated that it is cooperating with the regulator and has refuted reports on accounting issues as incorrect.