Friday, February 23, 2024

Sony Group sent termination letter to Zee, canceled merger deal: Report

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Sony group sends termination letter to Zee: Sony Group has sent a termination notice to Zee Entertainment Enterprises Limited, a day after the deadline for the $10 billion mega media merger deal expired. This news was given by Bloomberg on Monday. According to Bloomberg report, Sony Group has said in the termination letter that it is canceling the deal for merger between its Indian unit (Sony India) and Zee Media Network. This Friday, Zee had requested Sony to extend the deal deadline for the second time. Zee Group had said that it is committed to the merger and is working to complete the deal through mutual negotiations.

Actually, this merger deal was earlier to be completed by December 2023. At that time also Zee had requested to extend the deadline, to which Sony had agreed. But now there was a demand from Zee to extend the new deadline of January 20 fixed for this deal. But if Bloomberg’s report is to be believed, this time Sony Group has rejected the request to extend the deadline again. Bloomberg report says that Sony has informed Zee that it is canceling the merger deal due to ‘not meeting the conditions’.

It has been more than two years since the merger was announced

However, no official statement has been issued yet by either side in this regard. It is expected that the companies will soon give official information about this to the stock exchanges. It has been more than two years since the mega merger of Sony and Zee was announced. But after the merger, differences emerged over the question of who would lead the company, due to which the deal could not progress rapidly. After the merger, Zee had proposed to make its CEO Punit Goenka the CEO of the new company, but Sony refused to agree to it because the market regulator had initiated an investigation against Goenka.

Competition is going to increase in the Indian market

The Sony-Zee merger deal was considered very important in view of the possible merger between Disney’s Indian business and the media venture of Mukesh Ambani’s Reliance Industries, one of the country’s biggest industrialists. Elara Capital analyst Karan Taurani has said that ‘cancellation of the deal will have a negative impact on both the parties as both the companies were trying to increase their presence in the Indian market. In such a situation, if the merger deal between Reliance and Disney is done, then the competition will become very strong. Not only this, currently global streaming giants like Netflix and Amazon are also trying to increase their presence in the Indian entertainment market. In such a situation, it will not be easy for Zee Group, which has been struggling with declining profits, advertising revenue and cash reserve crisis for quite some time, to survive on its own in this competition. Zee shares closed with a decline of 1.5% in Saturday’s trading session in Mumbai. Indian stock market is closed on Monday due to the consecration of Ram temple in Ayodhya. Maharashtra government has declared a public holiday on this occasion.

 

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