Sony Group has officially called off its highly anticipated merger with Zee Entertainment Enterprises Ltd., ending a two-year journey towards forming a $10 billion media powerhouse, Bloomberg reported.

What Happened: This decision came to light as Sony withdrew its merger application from India’s National Company Law Tribunal (NCLT), signalling a clear end to the ambitious deal. The exact reasons behind the withdrawal remain under wraps as representatives from both Sony and Zee have kept silent on the matter.

This move not only marks the conclusion of a saga filled with delays and controversies, including leadership disputes and a regulatory investigation into Zee’s founders, but it also opens up both companies to increased vulnerability in a rapidly consolidating market.

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Bigger worry: Just a day before Sony’s withdrawal, Reliance Industries Ltd. and The Walt Disney Company unveiled their merger, creating an $8.5 billion giant set to dominate India’s media landscape.

The fallout from Sony-Zee’s failed merger leaves the industry wondering about Sony’s next steps in India, especially as the newly formed Reliance-Disney entity poses a significant challenge to competitors.

Analysts predict a shift in the industry’s dynamics, with content producers and advertisers likely leaning towards the larger Reliance-Disney joint venture. Amidst these developments, Sony has also had to address rumours of potential partnerships and navigate through the fallout of regulatory scrutiny faced by Zee over financial discrepancies.

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