On the 22nd, interviews with multiple parties revealed that the Sony Group has officially notified Indian media giant G Entertainment Enterprises of the termination of merger negotiations. Negotiations that lasted about two years ended in failure.
Sony G and G logo
Source: Bloomberg
According to multiple people involved who spoke on condition of anonymity because the negotiations are not public, Sony Group sent a letter announcing the termination on the morning of the 22nd. The official announcement is expected to be made in the afternoon of the same day. According to a letter obtained by Bloomberg, Sony cited the failure to meet the terms of the merger agreement as the reason for the termination.
The conclusion of the negotiations was due to an ongoing stalemate between the two companies over whether CEO Punit Goenka, the son of the founder, should be appointed as the top executive of the merged company. G’s side had been seeking Goenka’s appointment, but Sony G’s side was hesitant to appoint him in light of the regulatory investigation surrounding him.
A Sony G spokesperson declined to comment. Representatives for Gee did not respond to requests for comment.
Sony G has been strengthening its entertainment-related business and has been targeting India, which has over 1.4 billion people, as a major market. The merger of the two companies was expected to lead to the creation of a gigantic media company worth $10 billion (approximately 1.48 trillion yen), but the conclusion of negotiations has forced Sony G to reconsider its India strategy.
Sony G will merge with G on December 22, 2021.agreement. After the transaction is completed, Sony G will hold a majority stake and Goenka will lead the combined company as CEO. In September 2023, the companies announced that the merger was expected to be completed within the next few months.
Meanwhile, the Gee side extended the negotiation deadline of December 21, 2023 by one month. They had asked for a further extension, but no negotiations were reached by the new deadline of January 21st.
Hideki Yasuda, an analyst at Toyo Securities, said that the conclusion of the negotiations would not have much of an impact on business results or stock prices, but asked whether Sony absolutely needed G to capture the Indian market, saying, “There are things we can do on our own.” So I think there may be some delays, but it’s not a fatal injury.”
(Updates with analyst comment)
2024-01-22 03:16:10
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