Sony Corporation has officially withdrawn its agreement to merge its media and entertainment India unit Culver Max Entertainment (aka Sony Pictures Networks India), with Zee Entertainment Enterprises Ltd (ZEE), that it had filed with the National Company Law Tribunal, 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, Bloomberg reports.
Shares of ZEE fell a further 3% on Thursday’s trading after news of the development. The stock is down more than 37% in three months and 43% in 2024 so far.
The termination notice was sent by Sony to ZEE on January 22, citing the Indian media major’s failure to meet the merger agreement conditions. ZEE denied breaching the pact first 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 dominant competitor in the market.
Sony has declared it will reassess its strategy in India as a result but the ground reality is that it has little wiggle room to make any real challenge to the dominance of Reliance-Disney.
Meanwhile, per Bloomberg, India’s market regulator SEBI 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.
