Sony Pictures Network (SPN), the global entertainment unit of Japan’s Sony Group Corp., has initiated talks with Walt Disney Co. about a potential acquisition of its India business. The Initial discussions with Disney are part of Sony’s bombshell plan in case its ongoing merger agreement with Zee Entertainment Enterprises Ltd. faces inordinate delay or collapses.
Disney Star India is a leading entertainment company in India. It operates more than 70+ Television channels such as Star Plus, Star Gold, Star Bharat, Star Movies, Star Pravah, Star Jalsha, etc., and the popular Disney+Hotstar online streaming service. Several entities, together with Reliance Industries (Viacom18), the Adani Group, and Sun TV Network, have explored the acquisition, either in full or in part, of Disney’s Indian business.
Disney’s India business may fetch only an element of its previous value given the evolving media and entertainment landscape globally and in India. While the linear entertainment business generates over $500 million in profits, the sports and digital segments have incurred losses. When Disney acquired Star India as part of its $71.3 b illion deal to acquire Rupert Murdoch-owned 21st Century Fox, the Indian business was valued at $17 billion.
Disney India was not up for sale until six months back. Now that it is, top bosses in SPE see Disney India as a better proposal, one where they have cultural similarities, too,”. These disputation are in the preliminary stages, and Sony will only pursue them if the Zee deal collapses. “But they don’t want to waste any more time and will proceed aggressively if that happens, as the opportunity cost would be too high,” the second person added.
Before joining Sony in March 2021, Ahuja was president of business operations and chief financial officer of Walt Disney Television, where he played a central role in merging Disney, ABC Television and Fox Networks after Disney acquired Fox in early 2019. Ahuja was also CFO of the Fox Networks Group before the acquisition by Walt Disney. Vinciquerra spent almost 10 years at Fox from 2001 to 2011 where he served as chairman and CEO of Fox Networks Group.
The India business of Disney, encompassing Star India and Disney’s existing India operations, has faced a significant drop in valuation due to the loss of key leaders and the discontinuation of content deals with select studios, including HBO. This decline in value is further compounded by Disney’s decision to hold digital rights only for ICC events, departing from its previous hold over top cricket properties of the ICC, the BCCI, and the Indian Premier League.
In December 2021, Sony Pictures Networks India (SPNI) agreed to merge with Zee Entertainment. This deal involved SPE, the indirect parent of SPNI, committing to invest around $1.06 billion as growth capital for the merged entity, along with a non-compete fee of $147 million paid to Zee’s founders.
The deal was initially expected to close by 31st of March 2022. However, it was only on 10 August the following year that the Mumbai bench of the National Company Law Tribunal (NCLT), finally gave its permission to the merger after lengthy hearings where multiple financial lenders to ZEE promoters opposed the scheme. While the merger scheme is now approved, the Indian markets regulator has now barred Zee’s Punit Goenka, who was to be named managing director and CEO of the merged company, from holding any key position in the combined entity.
Sony said, “Although the transaction was previously expected to close by the end of the first half of the financial year ended on 31st of March 2024, based on the latest progress, it is currently expected to close in the months ahead. Sony continues to assess the impact of the transaction on its consolidated financial results.” For More Updates, visit: livemint.com
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