Sony calls off $10 billion merger with Zee, ending 2-yr stalemate

Sony has called off the $10 billion merger between its India unit and Zee, ending a two-year stalemate, Bloomberg has reported.

Sony reportedly sent a termination letter to Zee early Monday and is expected to disclose the same to the exchange. Sony has cited "conditions of the merger agreement not met" as the reason to scrap the deal.

The termination follows a stalemate between the companies over whether Zee’s Chief Executive Officer Punit Goenka would lead the merged entity amid a probe into his conduct by SEBI. The standoff now appears to have scuttled the deal, which would have created a $10 billion media giant with the financial muscle to take on global powerhouses Netflix Inc. and Amazon.com Inc.

The termination letter from Sony came after a 30-day grace period ended over the weekend when the two sides couldn’t reach an agreement on a deadline set in late December. This created an eleventh-hour tussle in the two-year-old merger plan that has already seen its fair share of drama and delays.

Sony and Zee entered into a merger agreement to create a media behemoth with the massive viewership and pricing power in the country of over 1.4 billion people.

A collapsed deal will leave both more vulnerable at a time when billionaire Mukesh Ambani-led Reliance Industries Ltd. is negotiating a merger with Walt Disney Co.’s India unit.