Sony confirmed on Monday (Jan 22) it is pulling out of a US$10-billion merger agreed in 2021 of its Indian operations with local rival Zee Entertainment.
The collapse is a blow to both firms’ hopes of better competing with streaming rivals such as Disney, Amazon and Netflix in the booming entertainment market of 1.4 billion people.
The Japanese firm said in a statement that on Monday it “issued a notice terminating the definitive (merger) agreements” by the two companies and that “closing conditions … were not satisfied”.
The merger was agreed in 2021, with Zee chief executive Punit Goenka saying the new outfit would be worth close to US$10 billion with annual revenues approaching US$2 billion.
But closing the deal has been problematic, most recently because Sony reportedly did not want Goenka – who is facing a regulatory probe – to run the combined entity.
In addition, Sony had become concerned about slumping profits at Zee since 2021, a source at the Japanese firm who declined to be named told AFP last week.
India’s entertainment market, worth tens of billions of dollars, is already one of the world’s biggest, while smartphone adoption is forecast to expand further in the coming years.
AFP
