Sony terminates $10-bn merger pact with Zee
New Delhi, January 22
Sony Group Corp on Monday said it is calling off a $10 billion merger of its India unit with Zee Entertainment, following a stalemate over who will lead the merged entity.
The entertainment giant sent a termination notice to Zee on the deal, which was announced more than two years ago, and is seeking $90 million as break-up fee for violating the terms of the merger pact and “invoking arbitration”.
In a stock exchange filing on the issue, Zee on its part denied all claims made by Sony and said it is exploring legal remedies. “Zee has displayed utmost commitment towards the merger by undertaking several permanent and irreversible steps, resulting in one time and recurring costs for Zee,” it said.
A standoff over leadership is said to be the reason for the deal being called off. Sony had resisted demand by Zee chief executive Punit Goenka, who was investigated by market regulator SEBI over fraud allegations, to stay on after the merger.
The deal was seen as crucial for both companies for survival in the world’s fastest-growing large economy.
“Sony Pictures Networks India Pvt Ltd (now known as Culver Max Entertainment Limited), a wholly owned subsidiary of Sony Group Corporation, today issued a notice terminating the definitive agreements entered into by SPNI and Zee Entertainment Enterprises Ltd. relating to the merger of ZEEL with and into SPNI, which was previously announced on December 22, 2021,” the Japanese firm said. — PTI
Seeks $90 million as break-up fee
- The entertainment giant sent a termination notice to Zee on the deal and is seeking $90 million as break-up fee for violating the terms of the merger pact and “invoking arbitration”
- In a stock exchange filing on the issue, Zee for its part denied all claims made by Sony and said it is exploring legal remedies
- The deal would have created an entertainment conglomerate with over 70 Indian TV channels, popular Bollywood studios and an extensive film library to take on global powerhouses Netflix and Amazon
