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ZEE-Sony calls of merger: Termination notice likely to be issued before January 20

According to the reports, Sony will likely issue a termination notice before January 20. This may lead to significant downside in the shares of ZEE Entertainment Enterprises Ltd. Sources explained that Sony is refusing Punit Goenka as the MD and CEO of the merger entity amid a regulatory probe. This merger termination would scrape the $10 billion deal, which would have made it the largest media company in India.

Sony and Zee entities are set on their stand, and the merger is at the cliff of breakdown. Both entities owned over 70 TV channels, two video streaming services (ZEE5 Studios and Sony LIV), and two film studios (ZEE Studios and Sony Pictures Film India). The merger breakdown will be a loss for both parties, per sources. The merger of Sony-Zee would have been a potential competitor to the Reliance-Disney association that will merge recently.

Image Credits: Akonnchiroll

The Unresolved Issues Friction:

Goenka is under investigation by the Securities and Exchange Board of India (SEBI) for allegedly diverting company funds. However, Goenka stands adamant about the agreement signed in 2021 that he would lead the new company. Sony refuses to keep Goenka as the company’s leader due to its strict governance standards and the potential reputational damage of having a leader facing allegations.

Apart from Goenka’s situation, some reports suggest that the merger faced concerns regarding shareholder approvals, especially Zee’s minority shareholders, who might not be on board with some of the terms involved. They have faced many unforeseen hurdles in merging operations, streamlining processes, and managing finances. Though the Competition Commission of India (CCI) approved the merger, earlier sources suggest that the entity’s dominance in the Indian media market led to investigations and dominance.

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Impact of ZEE-SONY merger withdrawal in Industry:

The withdrawal of the merger will undoubtedly severely affect the Indian landscape. As the merger promised advanced content creation, distribution channels, and advertising reach, it will significantly lose synergies and opportunities. The calling off of the merger will result in lower revenue generation and reduced profitability, leading to reduced bargaining power. As per calculations, ZEE would have to pay INR 11,000-12,000 crore over the tenure of this deal.

The failed merger could erode investor and stakeholder confidence, potentially impacting stock prices and future investment prospects. Both companies may grapple with uncertainties in shaping their future strategies. The fallout is particularly significant as ZEE brought regional languages and original programming while Sony contributed sports and international content to the diverse content pool. This loss of synergy could affect the companies’ ability to compete effectively and adapt to evolving market demands, intensifying challenges for sustaining growth and market presence. The repercussions underscore the critical need for successful mergers to harness complementary strengths and fortify market positions.

The uncertain future of ZEE and Sony:

The merger of these companies was one of the largest entertainment media mergers, and with its uncertainty, the future of both companies is doubtful. With the dismissal of the merger, Zee would face many challenges and increased competition from Star India, Reliance Jio, and Disney+Hotstar. Apart from the competition, it may face a large layer of complexity due to Punit Goenka’s ongoing investigation and legal troubles. For Sony, ZEE’s partnership helped in the depth of regional languages and original programming; they needed to cater to diverse Indian audiences.

Image Credits: Zee Media


A glimmer of hope for ZEE and Sony may be to focus on their core strengths and pursue independent growth strategies. The dissolution of the merger may lead to new opportunities for smaller players in the less competitive landscape. Ultimately, their future remains uncertain, and the path ahead will be defined by resilience and adaptability to embrace new opportunities.


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