Sony Terminates Merger Deal With Zee; Seeks $90 Mln

Sony Group terminated the proposed merger of its Indian units with Zee Entertainment Enterprises Ltd. and sought a termination fee of $90 million from the company.

Culver Max Entertainment Private Ltd. (formerly known as Sony Pictures Networks India Private Ltd.) and Bangla Entertainment Private Ltd. informed Zee about their decision to terminate the merger co-operation agreement dated 21 December 2021, the Indian media and entertainment company said in a stock exchange announcement today.

Sony Group’s Indian units invoked arbitration and are seeking a termination fee of $90 million alleging Zee breached the agreement terms, it added.

Zee said it categorically denies all the assertions raised by Culver Max and Bangla Entertainment on the alleged breaches under the agreement terms, including their claims for the termination fee.

“The board has noted that the company took all the required steps in the course of its integration journey over the last two years, to ensure that the scheme is implemented at the earliest,” Zee Chairman R. Gopalan said. “We are evaluating the next steps and considering the appropriate course of action.”

Zee said the company will take all the necessary steps to protect the long-term interests of all its stakeholders, including appropriate legal action and contesting Culver Max and Bangla Entertainment’s claims in the arbitration proceedings.

Earlier this month, local media reported that Sony is considering ending its proposed $10 billion merger between its India operations and Zee, and could send a termination notice this month. Zee later said the report was “baseless” and “factually incorrect," and the company working for a successful closure of the proposed merger.

Zee and Sony in December 2021 signed definitive agreements to merge their businesses. The proposal earlier received approvals from the NSE, BSE and Zee shareholders. The Competition Commission of India also approved the merger with modifications.

However, the merger faced hurdles, including opposition by Zee’s creditor Axis Finance.

Zee today said the company will continue to evaluate organic and inorganic opportunities for growth, leveraging the intrinsic value of its assets.

(Send feedback to editor@cornerofficejournal.com)