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Even though the proposed merger of its Indian arm with Zee terminated, Sony will seek various options, including finding another opportunity to replace the plan and organic growth opportunities in India, which has great potential in the long term, said Hiroaki Totoki, president, COO and CFO of Sony.
In the earnings call, Tokoki said India continues to have great growth potential, and is an appealing market. “India, on a long-term basis, has a great growth potential. It’s a very appealing market. Therefore, we will try to seek various opportunities, and if we can find another opportunity that would replace this type of plan,” said Totoki when asked about the firms plan after terminating its merger agreement with Sony.
On the investment, which Sony had committed as part of the deal, Totoki mentioned it did not have solid plans for the investment as of yet. “Well, that investment is not going to change a capital allocation or it will not change our behaviour in our investment. So, at the moment, we do not have any concrete plans.”
As part of the merger deal, which was signed between Zee and Sony, the Japanese firm had planned to invest $1.5 billion into the merged entity.
After nearly two years of negotiation and planning, Zee and Sony terminated their $10 billion media merger after certain conditions were not met.
Both firms are charting their own path after terminating the merger agreement in January. Earlier this month Zee CEO and MD, Punit Goenka, told his investors that the future of Zee will hold frugality and optimisation strategies to navigate the market environment. Goenka maintained that Zee’s fundamentals remain strong and it can compete as a major player in the sector.
Legal tangle
The aftermath of the merger termination also includes a long legal affair, where Zee has approached the National Company Law Tribunal (NCLT) and Sony approached Singapore International Arbitration Centre’s (SIAC). While Zee wants NCLT to legally implement the merger scheme, Sony wants a $90 million termination scheme from Zee.
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