Finally, the news is official now Sony-Zee Entertainment Merger is off the table, and called off. Sony Group Corp has formally communicated to Zee Entertainment Enterprises Ltd its decision to cancel the proposed $10 billion merger involving its India unit and the media network. The announcement was made on January 22, following the expiration of the discussion period for the extension of the merger’s closing date.
In a statement, about the Sony-Zee Entertainment Merger, Sony revealed, “The merger did not close by the end date as, among other things, the closing conditions to the merger were not satisfied by then.” Sony Pictures Networks India Private (SPNI) had engaged in good faith discussions to extend the end date, but an agreement couldn’t be reached. Consequently, on January 22, 2024, SPNI officially terminated the definitive agreements with ZEEL.
The definitive agreements stipulated that if the Sony-Zee Entertainment merger failed to close within 24 months of their signature date, the parties would enter discussions in good faith to extend the end date. This discussion period was required to conclude within 30 days after the end date. However, if an agreement on an extension wasn’t reached by the end of this period, any party had the right to terminate the agreements with written notice.
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Sony clarified that its consolidated financial results forecast for the fiscal year ending March 31, 2024, announced on November 9, 2023, did not factor in the merger’s impact. The termination of the definitive agreements is not expected to have a material impact on Sony’s consolidated financial results.
This development comes just three days after Zee, in a regulatory filing, had expressed its commitment to the merger with Sony. Zee had emphasized its ongoing efforts to bring about a successful closure of the $10 billion merger and engage in good-faith negotiations with Sony regarding an extension of the effective date.
Earlier reports had hinted at Sony’s inclination to call off the merger due to disagreements on the leadership structure of the merged entity. The $10 billion merger discussions, initiated in 2021 and originally slated for completion by December 21, 2023, faced delays as Zee sought a deadline extension, a request to which Sony had initially agreed.