Sony’s ambitious $10 billion media deal in India has ended in a tumultuous breakup, marking the conclusion of a dramatic acquisition saga in one of the world’s fastest-growing media markets. The merger between Sony Group and Mumbai-based Zee Entertainment, announced two years ago, aimed to establish a formidable $10 billion media entity in India, poised to compete with both local rivals and global streaming giants like Netflix and Amazon. However, Sony’s recent announcement indicates the termination of the deal, citing unsatisfied closing conditions.
The decision to call off the merger comes at a crucial time when Disney and Mukesh Ambani’s Reliance Industries are engaged in discussions about merging their respective Indian media businesses. Sony’s statement mentioned that the closing conditions were not met, without specifying the exact nature of the unmet conditions. Reports suggest tensions between the two companies, particularly regarding the leadership of the combined entity. Zee had proposed its CEO, Punit Goenka, to lead the merged company, but Sony disagreed, citing an ongoing probe by India’s market regulator.
Zee Entertainment, in response to the termination, stated that it is evaluating available options. Additionally, Sony is reportedly seeking a termination fee of $90 million, alleging breaches by Zee of the merger terms. Zee strongly denies these assertions, including the claims for the termination fee.
This breakup occurs amidst intensifying competition in India’s entertainment industry, considered highly attractive by global entertainment companies due to its relatively free market and vast English-speaking population. India, currently the world’s fifth-largest media and entertainment market, is anticipated to become the third-largest soon, according to Prime Minister Narendra Modi’s government. The potential Disney-Reliance deal, if successful, would not only strengthen Disney’s position in India but also create a massive entity boasting over 100 TV channels and two streaming platforms.
