Sony Group has scraped the merger between its India unit and Zee Entrainment. The deal started with signing of term-sheet between the parties in 2021, was valued at $10 billion and it was supposed to result in the formation of the largest media conglomerate in the Indian media and entertainment space.
This also happens to be the only deal which was called-off event after it was cleared by regulatory agencies like Competition Commission and NCLT. While it was heart breaking for both the parties, Zee has much to lose on its part as it has compromised many of its lucrative business opportunities for the sake of fulfilling Sony’s expectations.
For instance Zee has shut down its profitable and running businesses in Russia, Germany and Thailand as Sony did not want to keep investing in those areas. In addition Zee also compromised its focus on internet distribution business housed under Margo Network as it was looking to divest the same as mandated by Sony despite investing Rs 520 crores few months before announcement of the merger deal.
For Sony India this was not the first case of deal drop, it has almost failed to conclude many such deals in the past that involved significant investment in Indian media and entertainment space.
Sony vs Eenadu deal in 2011:
In 2011, Multi-Screen Media (MSM), which was running Sony Television in India, has initiated a deal to buy Ramoji Rao-owned Eenadu TV’s (ETV’s) bouquet of 11 regional channels. It was viewed as the biggest media deal in India, valued around $500-600 million, to give Sony a bigger share in the regional television space. However, the deal didn’t culminate despite talks reaching advanced stage due to pricing issue and FDI hurdles. Subsequently, Raghav Bahl’s Network18 acquired the regional entertainment and news channel of ETV Network in 2012 for a better valuation.
The deal turned out to be lucrative for the buyer with ETV channels joining the Colors franchise under Viacom18 and News channels becoming part of News18 Network.
Sony vs MAA TV in 2012:
In 2012, Sony Pictures Television (SPT) has entered into a strategic alliance with Maa Television Network to acquire a 30 per cent stake in the latter in a bid to set foot in regional television with a plan to expand it subsequently with acquisition of majority stakes. The deal didn’t culminate despite majority shareholders of Maa Television Network and SPT signed a Letter of Interest (LoI). Sources revealed that Sony was not agreeable to the valuation demanded by the (then) Maa TV promoters comprising actor K Chiranjeevi, his brother in law Allu Arvind, actor Nagarjuna Akkineni and entrepreneur Nimmagadda Prasad.
Subsequently, In 2015, STAR India under Udayshanker’s leadership acquires MAA TV’s broadcast business for Rs 2,500 crore for four Telugu entertainment channels MAA Gold, MAA Music, MAA Cinema and MAA TV GEC. This also tuned out to be a fruitful investment for Star India as they managed to make Star Maa a strong brand in Telugu GEC space, dominating the rating charts for years.
Will ZEE see a similar lucrative fortune like Eenadu and Maa TV, Let’s wait and see!
