Sony Group Corp., the entertainment giant based in Japan has officially sent a letter to Zee Entertainment Enterprise Ltd. notifying about the termination of the merger between its India unit and media network. The update leaves Zee vulnerable to competition as rivals bulk up.
As per the letter read by Bloomberg News, Sony mentioned the reasons for termination as ‘merger agreement not being met’. The company is expected to bring up the letter to the exchange later.
Neither of the entertainment companies has responded to the report.
This long awaited merger that was initially announced around two years ago has hit a stalemate over the leadership of the merged entity. Zee proposed Punit Goenka, the present CEO, however Sony is said to have disagreed due to the market regulator probe into Goenka.
The standoff now appears to have scuttled the deal of $10 billion between the entertainment giants.
The termination letter from Sony came after a 30-day grace period ended over the weekend when the two sides couldn’t reach an agreement on a deadline set in late December. Zee already skipped the Zee-Sony merger deadline in the last month while asking for an extension of the deadline.
Updated at 13.28 :
Statement from Sony Pictures Entertainment
“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. 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.”
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