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HomeNewsZee shares slump 10% after failed Sony India merger

Zee shares slump 10% after failed Sony India merger

Zee Entertainment Enterprises Ltd. shares plunged as much as 10 per cent after the cancellation of a planned $10 billion merger with Sony Group’s India unit.

Shares of Zee saw a steep plunge on Tuesday.(Bloomberg)
Shares of Zee saw a steep plunge on Tuesday.(Bloomberg)

Zee’s stock traded at 208.3 (early trade), marking its lowest point since mid-July 2023. It has experienced an 8 per cent decline since the merger announcement in September 2021 and a 16 per cent drop in 2024, driven by apprehensions surrounding the deal.

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Why did Sony call off its India unit merger with Zee?

Sony Group Corp. on Monday formally communicated to Zee Entertainment Enterprises Ltd. its decision to cancel the merger with its India unit.

Sony, in a statement, said, “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 Ltd (SPNI) has been engaged in discussions in good faith to extend the End Date but the Discussion Period has expired without an agreement upon an extension of the End Date. As a result, on January 22, 2024, SPNI issued a notice to ZEEL terminating the definitive agreements.”

IN DETAIL- No deal: Sony sends termination letter to Zee over India merger

Zee to move court

Zee Entertainment is planning to take legal action against Sony Group after the Japanese company ended a $10 billion merger in India, it said in a regulatory filing on Monday.

“The Board would like to assure its stakeholders that the Company will take all the necessary actions, in the best interest of all stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL’s claims in the arbitration proceedings. The Board has complete faith in the highly experienced senior management of the Company and will continue to guide the team,” said. R. Gopalan, chairperson, Zee.

IN DETAIL- ‘Punit Goenka was agreeable to step down’: Zee plans legal action against Sony

The statement further added that Punit Goenka, MD & CEO of Zee, was “agreeable to stepping down in the interest of the merger”.

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