The leadership at Culver Max Entertainment (aka Sony Pictures Networks India), the Indian media arm of Japan’s Sony Group, has reportedly returned to the negotiating table with Zee Entertainment Enterprises Ltd, with the aim of reviving the collapsed $10 billion merger plans, which ZEE has been strongly pushing for.
Industry watchers see the impending merger between Disney’s India unit and Reliance’s Viacom 18, which is nearing finalisation, as the key factor bringing the two sides back to the negotiating table.
ZEE continued to argue for the revival of the merger that was called off on January 22, Economic Times reported. The business daily added that meetings have taken place over the last last fortnight to “salvage the deal”.
Representatives from both sides have met at various locations across Mumbai as attempts to revive the deal has gathered steam recently, the report stated.
“There is no guarantee that the talks will lead to an agreement. But efforts are on to see if there can be an out of court settlement, including renewing the merger agreement,” an industry source told Hindu BusinessLine.
However, the differences between ZEE and Sony persist on various issues which makes a fresh agreement “easier said than done”.
But it also bears noting that “Even in NCLT, Zee has argued in favour of the merger. Punit Goenka has conceded a lot to Sony in order to push through the merger,” said source told BusinessLine.
As for Sony, comments made last Wednesday by Hiroki Totoki, president, COO & CFO of Sony, offer some pointers. Totoki emphasised that India has a great growth potential on a long-term basis. “It’s a very appealing market,” he said, answering an investor’s question during the earnings call after the conglomerate declared its results for the quarter ended December 31, 2023.
Totoki assured that the setback with ZEE will not hinder the company’s investment strategy.
“Therefore, we will try to seek various opportunities. And if we can find another opportunity that would replace this type of plan, we will look into that, and we will also continue to look into organic growth and our strategy,” he added.
Totoki’s assertions notwithstanding, the fact of the matter is that “another opportunity” just does not exist currently in the Indian media and entertainment space that offers any real scale.
Totoki admitted as much when he said: “So at the moment, we don’t have any concrete plans.”
The Japanese tech giant first proposed to combine its India entertainment business with ZEE back in December 2021. The negotiations collapsed after more than two years.
Last month, Sony said that it terminated the transaction because “among other things, the closing conditions to the merger were not satisfied” by the agreed closing date. The Japanese giant said it had engaged “in good faith” in discussions to get an extension to the closing date. ZEE at the time denied all allegations made by Sony that it breached the merger agreement, adding that it would take “appropriate legal action.”
