July 17, 2026

Zee & Sony: Merger Terminated

By Linus Garg
First publised on 2024-01-23 07:41:03

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Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

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The merger deal between Sony Corp and Zee Entertainment Enterprises is finally off. Sony has sent a termination notice along with demand for compensation of $ 90m as termination fees. It cited unmet merger conditions as the reason for termination and has invoked arbitration. But it seems that the deal fell through mainly because the two companies could not agree on who will head the merged entity. Zee MD Punit Goenka was in Ayodhya for the consecration ceremony when he received the information. He called it 'a sign from the Lord'.

But even if it is a sign form the Lord, what is now surely going to happen will be a messy affair. Zee has denied Sony's allegations and has said that it will contest the latter's claims in arbitration proceedings as well as take legal action. Zee wanted its MD Punit Goenka to head the merged entity. This was not acceptable to Sony as Goenka faces regulatory investigation. Sony wanted its India MD NP Singh to head the operations. Zee did not agree to this and this was the main reason that the $10bn deal fell through. Zee said it had sought six more months to cement the deal but Sony did not want to extend the date.

If the deal had gone through, Sony and Zee would have built an entertainment powerhouse that would have controlled 70 TV channels, two live streaming services (Zee5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India). It would have given the company a head start in competing with global streaming giants like Netflix and Amazon Prime. But the termination is likely to hurt both Zee and Sony. Zee Entertainment shares crashed by 27% to Rs 168 the day after the news came out.