Sony remains bullish on India despite Zee merger fallout
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2 months ago 06:00:39am Television

Sony remains bullish on India despite Zee merger fallout

New Delhi, 24-January-2024, By IBW Team


Sony remains optimistic about India’s growth potential despite the collapse of the proposed merger with Zee, asserting its commitment to exploring alternative avenues for expansion in the country. Hiroki Totoki, Sony’s President, COO & CFO, emphasized during an earnings call that India’s promising market warrants continued investment.

“We see significant long-term growth potential in India. It’s an attractive market for us, and we’ll actively pursue various opportunities to replace the previous merger plan,” Totoki stated, highlighting Sony’s strategic focus on India’s growth trajectory.

Regarding the investment initially earmarked for the merger, Totoki clarified that Sony’s capital allocation and investment strategy would remain unaffected. Concrete plans for the allocated funds are yet to be determined, Economic times reported.
The proposed merger, which included a USD 1.5 billion investment by Sony, was part of an agreement with Zee Entertainment Enterprises Limited (ZEEL). Despite the termination of the merger, Sony plans to pursue organic growth opportunities in India, operating through Culver Max Entertainment (formerly Sony Pictures Network India).

Sony terminated the merger agreement with ZEEL last month, citing ZEEL’s failure to meet merger conditions. This led to arbitration proceedings initiated by Sony, claiming a termination fee of USD 90 million. ZEEL, in turn, filed a petition with the National Company Law Tribunal (NCLT) seeking enforcement of the merger scheme.

On February 4, the Singapore International Arbitration Center (SIAC) denied Sony’s interim plea to halt ZEEL from approaching the NCLT. The NCLT Mumbai bench has issued a notice to Sony regarding the petition.

The proposed merger, approved by the NCLT in August 2023, aimed to create a media entity valued at USD 10 billion. If successful, the combined entity would have boasted over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), positioning itself as the largest entertainment network in India.
Sony Pictures Network India, an indirect wholly-owned subsidiary of Sony Group Corporation, currently operates 26 channels in various languages, reaching an audience of over 700 million. Additionally, its OTT platform, Sony LIV, caters to around 33 million viewers with a diverse range of content including live sports, movies, and original programming.

For the fiscal year 2023, Sony reported a revenue of Rs 6,684 crore, underscoring its substantial presence and potential for growth in the Indian market.

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