Sony Group said on Wednesday it will consider other opportunities in India after pulling the plug on a $10 billion merger with Zee Entertainment Enterprises Ltd.
The Japanese conglomerate added India is a very promising market and has great potential in the long-term.
This was disclosed by Hiroki Totoki — president, COO & CFO of Sony — in a concall after the conglomerate declared its results for the quarter ended December 31, 2023.
Sony Group on January 22 scrapped the merger deal with Zee saying the closing conditions could not be executed by the Indian company.
It sought a $90 million termination fee from Zee, which was contested by the latter.
The Indian media and entertainment company then approached the National Company Law Tribunal (NCLT) seeking the enforcement of the merger by Sony.
Responding to questions on the future of Sony’s entertainment business in India at the earnings call, Totoki said negotiations with Zee are not proceeding at this point of time, but Sony is continuing to bet on the entertainment sector in India given its strong potential as it is a very “appealing market’’.
“We will try to seek various opportunities’’ to replace the proposed merger with Zee. At the same time it would also continue to grow organically.
Totoki’s statements raise the possibility the Japanese company may examine some arrangement with other players in the Indian entertainment industry such as RIL or even the Adani group.
Sony posted consolidated sales of Yen 3,747.5 billion compared with Yen 3,078.3 billion in the year-ago period; Net income stood at Yen 294.82 billion against Yen 259.62 billion a year ago.
Zee alert
Sony’s results came a day after Zee declared its numbers for the period ended December 31, 2023. It reported a consolidated net profit of Rs 58.54 crore compared with Rs 24.32 crore in the previous year. However, total income dropped 2.36 per cent to Rs 2,073.36 crore compared with Rs 2,123.56 crore a year ago.
Zee’s managing director and CEO Punit Goenka told analysts in its earnings call the company will review its entire business portfolio following the termination of the merger with Sony. This was his first interaction after the failed merger with Sony.
“We will be relooking at the entire portfolio of the business to see which businesses will add the maximum value to our portfolio. We need what to focus on, and what we don’t need to focus on going forward,’’ Goenka said .
Goenka disclosed Zee will follow a three-pronged approach — frugality, optimisation and sharp focus on quality content — for the company’s future. His comments on frugality has sparked speculations that there could be some layoffs at the company.
