Sony-Zee merger is cancelled

The merger between Sony and Zee fell through due to disagreements over more than 20 compliance issues, according to internal emails seen by Reuters.

The merger between Sony and Zee fell through due to disagreements over more than 20 compliance issues, according to internal emails seen by Reuters.

The clash involved issues such as Zee's failure to dispose of certain Russian assets and its $1.4 billion cricket rights deal with Disney.

Emails exchanged between Sony's legal and M&A executives in India and Los Angeles and Zee's top executives revealed a behind-the-scenes struggle that led to Sony's decision to cancel the $10 billion merger.

Executives from both companies alleged that the other party did not adhere to the commitments outlined in the merger agreement. Zee executives insisted that everything was in order and requested Sony to extend the closure deadline.

Drew Shearer, a top Sony executive based in Los Angeles, expressed concerns in an email dated December 20 about events that could have a "material adverse effect" on the business, leading to the eventual merger fall off

Zee's top India counsel, Shyamala Venkatachalam, responded on December 27, accusing Sony of attempting to create a baseless narrative and describing Sony's actions as a "sudden volte face" in bad faith.