All companies around the globe do strategic planning as they decide to vertical or horizontally integrate their company. The companies have their core business and then decide to enhance something or capture a different piece of the market. Only after the merger goes through does the issue of how much did it add to the company is found out. There are potential savings and potential growth, but the execution of the plans is done after the merger.

In an article by Nishit Navin and Chris Thomas of Reuters, Japan’s Sony Corp scrapped plans for a $10 billion merger of its Indian unit with Zee Entertainment which would have created one of South Asian biggest TV broadcasters.

Sony submitted a brief to the Indian Stock Exchange asking for a $90 million termination fees for alleged breaches of their merger agreement and emergency interim relief by invoking arbitration. Zee denies the claims.

While neither statement said what conditions were breached, what is known is Sony did not want Zee Chief Executive Punit Goenka at the helm of the merger company because Mr. Goenka is the subject of India’s market regulator. Sony want Mr, Goenka out before the merger, Mr. Goenka wanted to leave after the merger as he denies the allegations.

If the merger had gone through Sony and Zee would have a portfolio of 90-channel plus.

Sony said the collapse of the merger would not expected to have any material impact on its estimates for the year.

Linking to dividend paying stocks, similar to many things in life, people and who they are the big factors in any merger. A company can have great assets or great potential assets, but does the other side want to work with them or is there a culture situation. Often times in startups, the culture is much different than older mature companies, but older mature companies have access to credit or potential to grow the business. People still count.

There are more questions than answers, till the next time – to raising questions.