The big, bad breakup: Inside Sony’s walkout from the $10Bn Zee merger


Sohini Mitter

23 reads

Sohini Mitter

23 reads

Japan’s Sony Group and India’s Zee Entertainment have called it quits after an over two-year courtship. A deal meant to birth the country’s largest media and entertainment entity has gone haywire, exposing both parties to heightened competition and long-drawn legal battles. What's the endgame?

January 25, 2024


Key Takeaways

  • The collapse of the ZEE-Sony deal comes at a time when winds of consolidation are blowing across India's $29.2 billion media and entertainment industry
  • Both parties have squandered the opportunity to create a $10-billion media behemoth comprising 70+ TV channels, 2 OTT platforms and 2 film studios
  • ZEE, which saw a 95% drop in net profits in FY23, is believed to be scouting for other financial and strategic partners that could bail it out
  • Industry sources say Gautam Adani's AMG Media Networks is keen to make an open offer to ZEE—a move that would pit him directly against Mukesh Ambani's growing media empire.

It’s bad for both parties, but like in most separations, one invariably ends up more wounded than the other. 

In this case, the more affected party is Zee Entertainment Enterprises Ltd (ZEEL), which is having a nightmarish week. After being served a deal termination notice by Sony Group’s local entity (Sony Pictures Networks India) on Monday, ZEE stock crashed over 32% to hit the lower circuit on the BSE on Tuesday. It was trading at Rs 155—its lowest level since August 2020—before recovering slightly to close at Rs 165.75 on Wednesday. 

Until last week, the Mumbai-based media major had been continuing “good faith negotiations” with Sony Group, reiterating its commitment towards closing the $10 billion merger—which has been in the works since December 2021—and seeking a possible six-month extension on the deadline. Come Monday, however, everything had come to nought. 

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