Sony has pulled out of the $10 billion merger with Zee after two years worth of talk and due diligence. This is most likely to have an adverse effect on advertisers like Unilever Plc and Procter & Gamble. In all probability, they are likely to turn to a rival to reach India’s large consumer base, according to a Bloomberg report.
That’s where the news of the next big potential merger comes in. Mukesh Ambani is in talks with Walt Disney Co. Ambani’s Viacom18 might very well merge with Disney Star. If it goes through, the merged entity will control a third of the Hindi general entertainment in northern cities and more than a quarter of the Tamil market in the south of India. Furthermore, it will command a third of the video streaming market.
The merged entity will also potentially own licenses to almost every sports broadcast and fixture in the country. If the Zee-Sony merger had gone through, it would’ve been good competition and provided a platform for brands looking to capture a large market. Ambani is also looking to expand to consumer products. Everything from food to fashion, while promotion might be free for him, it’ll be expensive for rival brands.
Sony still does have a chance to acquire Zee. Subhash Chandra and family only has around 3.99 percent stake left in the company, owing to the money he had to shell out to cover expenses on infrastructure projects. Shareholders have the power to come together and oust the founders and merge with Zee if desired.