Sony looking at M&A options in India after Zee deal break

Sony chairman and CEO Tony Vinciquerra on Thursday said that Sony Pictures Entertainment (SPE) is looking at various merger and acquisition possibilities in India after the Zee-Sony merger agreement was called off earlier this year.

Speaking at the company’s Business Segment Meeting 2024 on May 30, Vinciquerra said that the merger deal between Sony Pictures Networks India (SPNI) and Zee couldn’t materialise due to regulatory issues and the falling of the Indian entertainment giant’s financials.

It is to be noted that the merger agreement with Culver Max Entertainment was terminated on January 22 due to disagreements over leadership and unmet closing conditions. Signed in December 2021, the merger deal, which was at the final stage of talks, had received all key clearances from stock exchanges, the Competition Commission of India, and the National Company Law Tribunal.

On Thursday, Vinciquerra said: “We have several other conversations (M&A) going on right now that could or might possibly end up in something that will help us in the marketplace. We are not concerned about our survival, as we have a very good business there.”

As per media report, SPE’s India arm had approached Viacom18 in 2020 to combine the two businesses. Recently, it was reported that there could be a strategic alliance between Sony and Kalanithi Maran’s Sun TV Network.

After the termination of the deal, the company had sought $90 million in termination fees from Zee. Zee, on the other hand, asked Sony to pay $90 million in termination fees over the failed merger deal.

Last week, a report in the Economic Times, stated that Zee Entertainment incurred Rs 432 crore in merger-related costs during financial years 2023-24 and 2022-23 due to its failed deal. Zee Entertainment’s merger-related costs were Rs 256 crore in 2023-24 and Rs 176 crore in the previous year.

As part of portfolio rationalisation and meeting merger conditions, Zee Entertainment incurred impairment charges of Rs 331 crore in 2022-23 due to the closure of certain businesses, including Margo Networks.

This means that the value of the businesses was reduced on Zee’s financial statements to reflect their diminished worth or operational discontinuation.

The company stated that the impact on consolidated results was Rs 98 crore in 2022-23, as losses from these entities had been recorded in earlier financial results. Business Today