Zee Entertainment seeks USD 90 million termination fee from Sony Group over failed merger deal
PTC Web Desk: Zee Entertainment Enterprises has made a significant move, seeking a termination fee of USD 90 million (approximately Rs 748.7 crore) from the Sony Group following the cancellation of their USD 10 billion merger deal in January this year.
In a regulatory filing on Thursday, Zee Entertainment Enterprises Ltd (ZEEL) said it was seeking termination fees from two Sony Group entities—Sony Pictures Networks India, now known as Culver Max Entertainment, and Bangla Entertainment (BEPL). ZEEL cited breaches under the Merger Cooperation Agreement (MCA) as the reason for terminating the deal by issuing a letter dated May 23, 2024.
The company has invoked termination fees from Culver Max and BEPL in accordance with the MCA provisions. ZEEL stated, "Culver Max and BEPL have failed to comply with their obligations under the MCA. Therefore, the company has terminated the MCA and called upon Culver Max and BEPL to pay the termination fee, ie the aggregate amount equal to USD 90 million."
Earlier in January 2024, Sony Group Corporation announced that ZEEL had not met the merger conditions and initiated arbitration proceedings before the Singapore International Arbitration Centre (SIAC). However, ZEEL contested this before the SIAC, which denied any interim relief to the Sony group against the Indian broadcaster. ZEEL subsequently moved the National Company Law Tribunal (NCLT) seeking implementation of the proposed merger, later withdrawing its plea.
ZEEL and SPNI had originally entered into an agreement to merge on December 22, 2021. The Mumbai bench of NCLT approved the merger scheme of ZEEL with Sony group entities Culver Max Entertainment and BEPL on August 10, 2023, which could have created a USD 10 billion media entity. However, two years after this approval, Sony Corporation announced the termination of the agreement.
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- With inputs from agencies
