Zee and Sony: An awkward split-up

livemint.com:

Word of Sony walking away from the altar of its merger with Zee had preceded Monday’s termination of their agreement. Its terms had not been met, said the Japanese group’s entertainment unit.

This brings the curtains down on a deal that went through twists and turns worthy of a mini-series. Its finale is best viewed in the context of Sony’s thinly veiled discomfort over the merged entity being headed by Punit Goenka, whose leadership was shadowed by charges of financial misconduct.

That he would be the proposed combine’s chief was controversial from the outset, as Sony would have a majority stake while Zee’s founding family got control via Goenka’s role in spite of a mere 4% holding. Zee has rejected Sony’s claim of unmet terms, claimed that Goenka was ready to step down from the top job and even threatened to sue Sony.

Yet, despite their business synergies, they were an awkward match, equity-wise, and perhaps it’s best they’ve split before a control battle could break out. This sector’s eyes will now turn to Reliance’s pact with Disney-Hotstar that’s said to be past storyboard stage; Reliance will probably be the majority partner and can expect a lion’s share of India’s TV ad revenues.