Sony Group has declared the termination of its 2021 merger agreement with Zee, pursuing $90 million in termination fees. Zee, in response, has refuted Sony’s claims, emphasizing its commitment to protecting stakeholders’ long-term interests.
Zee is evaluating options and intends to contest Culver Max and BEPL’s claims through legal action and arbitration proceedings to safeguard its position. Zee Entertainment, the Indian media conglomerate, asserts it will take legal action against Sony Group following the termination of merger plans, which would have created India’s largest broadcasting company.
Sony Ends Merger Plan with Zee in India Operations
On Monday, Sony announced the decision to terminate the merger of its India operations with Zee through Culver Max Entertainment, as declared in 2021. Sony Group Corporation’s wholly-owned subsidiary, SPNI, issued a notice today, terminating the definitive agreements with Zee Entertainment Enterprises Ltd (ZEEL) regarding the merger, as announced on December 22, 2021, according to a statement by Sony Group Corporation.
Sony Seeks $90 Million Termination Fees After Ending Zee Merger
The deal outlined a merger completion target before December 21, 2023, inclusive of regulatory approvals, with a one-month grace period. Upon terminating the agreement on Monday, Sony pursued $90 million in termination fees from Zee.
Zee, in a stock exchange filing, categorically refuted all claims by Culver Max and BEPL regarding alleged MCA breaches, including termination fee claims, asserting its rights. The company is evaluating options guided by the Board, aiming to safeguard stakeholders’ long-term interests through necessary legal actions and contesting Culver Max and BEPL’s claims in arbitration proceedings.
Zee’s Board Responds
During their January 22 meeting, Zee’s board of directors issued a detailed response, asserting that Zee Entertainment took all necessary steps to implement the merger scheme. The company confirmed engaging in multiple discussions with Culver Max and BEPL to extend the merger completion timeline, but no agreement materialized.
Zee stated that Punit Goenka, MD & CEO of ZEEL, was willing to step down in the interest of the merger. Discussions included proposals for the appointment of a director on the merged company’s board, protections for ongoing investigations and legal proceedings, and consequent modifications to the scheme. However, these discussions with the Japanese group did not yield any proposal, leading them to opt for agreement termination instead.
Also Read: Zee-Sony Merger’s Fate to Be Decided in Sony’s Board Meeting Today
