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Inside Story Of How Zee-Sony Deal Collapsed — NDTV Profit Exclusive

The battleground now moves from the boardroom to the courts. Season 2 of the Zee-Sony saga is set to begin.

<div class="paragraphs"><p>Source: File photo</p></div>
Source: File photo

Three years and four months after India's oldest media company announced a merger with Japanese giant Sony Group, the deal has officially been called off. But what led to the final nail in the coffin of a merger that had been negotiated in every aspect for the last several months?

Last-minute negotiations failed to save the deal that was seen as a lifeboat for Zee Entertainment Enterprises Ltd. In the end, a person aware of the talks told NDTV Profit, it came down to a battle of egos.

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Zee-Sony Merger Scrapped: All Eyes On Institutional Shareholders

Two Zee Proposals Rejected By Sony

The first proposal was to allow the merger to go through as cleared by the shareholders, with Punit Goenka helming the merged entity initially, the person said on the condition of anonymity as details are private. A joint hunt for a 'neutral' CEO acceptable to both sides would then be found to run the entity.

The second proposal was that Goenka step down from his position as CEO but retain a seat on the board. A board seat for a nominee of the promoters as an alternative was also offered, but this proposal was rejected as well, NDTV Profit learnt.

The acceptable scenario is where Goenka steps down and relinquishes a board seat and NP Singh, the current chief executive officer of Sony's India's operations, at the helm, the person said.

At the end of it, no agreement could be reached and a request by Zee to extend the deadline further was denied. The battleground now moves from the boardroom to the courts, where Zee is undoubtedly going to contest the $90-million termination fee that Sony is demanding.

It is also likely that a counterdemand will be made by Zee for verticals shut down and losses acquired to adhere to the terms of the merger.

Season 2 of the Zee-Sony saga is set to begin.