Deals that almost happened but fell off at the last minute

Near Misses: Promising Deals That Nearly Materialized But Slipped Away at the Eleventh Hour

When it comes to Mergers & Acquisitions, ‘happily ever after’ isn’t guaranteed.

In the complex dance of corporate matchmaking, not every courtship leads to a union. And it’s only fair. With billions of dollars at play, the line between a triumphant merger and an abrupt collapse is razor-thin, and sometimes the deals cannot reach fruition.

A closer examination of high-profile M&A deals in India that were announced with much fanfare but ultimately did not materialise offers great insights:

• Zee Entertainment & Sony’s Indian Arm The merger talks between Zee Entertainment Enterprises and Sony’s Indian arm, initiated in late 2021, was notably hindered by a leadership deadlock. Sony strongly favoured its own managing director, N.P. Singh, a veteran in the media industry, to lead the merged company. In contrast, Zee staunchly endorsed its managing director, Punit Goenka, who was embroiled in a regulatory investigation. This conflict over the top leadership role, amidst Goenka’s legal complications, critically impeded the merger’s progress.
• Reliance Industries and Future Groups Announced in August 2020, the ambitious $3.4 billion acquisition deal between Reliance Industries and Future Group, was called off. The deal’s collapse was primarily due to Future Group’s secured creditors rejecting the offer. The rejection was not just a business decision, but the climax of a two-year legal saga that involved Amazon (a key stakeholder opposing the deal). The high-stakes corporate deal was hence punctuated by court battles and regulatory hurdles.
• HDFC & Max Life Merger The proposed merger between HDFC Standard Life Insurance Co Ltd and Max Financial Services, intended to create India’s leading private life insurer, was called off due to extensive delays in the regulatory approval process. It was initially planned as a merger of Max Life with its parent Max Financial, which would then combine with HDFC Standard Life. However, India’s insurance regulator did not grant approval, and the involved parties faced challenges with finalizing and approving various alternate structures for the merger. These complications led to the dissolution of the standstill agreement between Max Financial Services, Max Life Insurance, Max India Ltd, and HDFC Standard Life, ultimately leading to the merger being called off​​.
• RCOM & Airtel Reliance Communications’s (RCOM) planned merger with Aircel was abandoned, marking another significant failed merger. The primary reasons cited for this decision were legal and regulatory uncertainties, as well as delays in receiving the necessary approvals. The statement from RCOM to the Bombay Stock Exchange highlighted these challenges as key factors in the decision to call off the merger, reflecting the complex legal and regulatory environment impacting telecom mergers in India​​.
• Flipkart & Snapdeal The Flipkart-Snapdeal merger, initiated in early 2017, was terminated after prolonged negotiations. Key reasons for the fallout included significant valuation differences and complex deal terms. Particularly problematic was the proposed share swap between Snapdeal (based in India) and Flipkart (registered in Singapore), which would have resulted in a highly inefficient tax structure under Indian law. This could have imposed a substantial tax burden on many of Snapdeal’s investors. Additionally, disagreements over the differential payouts to certain investors and the opposition from smaller yet influential shareholders like Premji Invest and Temasek further strained the negotiations. These factors, combined with the contentious relationship between the shareholders and the board, led to the collapse of the merger talks​.

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