Not all corporate marriages are made in heaven

This uncertainty also affects other companies contemplating similar mergers, reminding them that even lengthy negotiations might not culminate in a deal.

This is against the background of a sharp fall in mergers and acquisitions activity in the country in 2023, with large Indian companies as well as private equity firms cutting fewer deals.

While the decline has been attributed to the funding winter for startups, there was also a general loss of appetite for high-value transactions among some large conglomerates, either because they were distracted by other developments or because they were taking a strategic break.

As a result, the year witnessed fewer multimillion-dollar deals. However, this slowdown might not be entirely negative, as it offers valuable insights from failed or incomplete mergers.

For instance, in July, Taiwan's Foxconn called off a potential $20-billion semiconductor joint venture with the metals-to-oil conglomerate Vedanta, a year after the two companies had an accord to set up semiconductor and display production plants in Gujarat. The deal fell through due to unspecified reasons, though Vedanta's struggle to secure a technology partner and its financial challenges likely influenced the decision.

The two-year-long agreement between Sony Pictures and Zee Entertainment has faced similar challenges, with Sony revising its initial stance of keeping Puneet Goenka as the CEO of the merged company. This shift followed allegations raised against Goenka by market regulators. The uncertainties surrounding Goenka's previous dealings might lead Sony to opt for caution, even at the expense of losing progress on a deal that has been in the making for two years.

It may turn out to be a wise decision. The mess in the relations between Aakash Education and Byju’s, which acquired the coaching centre company in April 2021 for about a billion dollars, shows how either the acquirer or the acquiree’s past can come back to haunt a merger.

Indeed, choosing your partners with greater care might be a good lesson to draw from such troubled marriages. 

That the objectives of Sony and Zee were mismatched was clear from the outset. Sony aimed to gain market share in a rapidly growing Indian market where competition from the likes of Reliance, which is busy sewing up a deal with Walt Disney to take over its India business, is intensifying. 

For Zee’s founder Subhash Chandra, whose stake in the company is down to barely 4%, the deal was a matter of survival. The barbarians were at his gate and he needed a white knight. With Zee’s stock price soaring following the initial announcement of a potential merger, Chandra's immediate goal was met, yet Sony's broader objectives remained unresolved.

In the case of the Byju’s-Aakash deal, the dynamics were different. When Aakash agreed to the acquisition, Byju’s was being hailed as the Indian startup ecosystem’s biggest success story and it seemed like a sweet deal for the Chaudhry family that had founded the coaching centre chain. 

In 2019, private equity firm Blackstone picked up a 37.5% stake in the firm at a valuation of around $500 million. Two years later Byju’s acquired Aakash at a valuation of nearly a billion dollars. But today, with Byju’s future up in the air, and questions over Aakash's proposed IPO, it may not be quite the happy marriage it had seemed.

The Amazon Prime series "Made in Heaven" poignantly observes that some journeys are solitary, underscoring the need for self-love before forming partnerships.

Asking large multinational corporations to take lessons from a video series on Indian weddings may seem a bit thick. It might be better to turn to more conventional wisdom, specifically to that of William Congreve who in his 1693 comedy The Old Batchelour wrote “Married in haste, we may repent at leisure."