Zee Entertainment has declared its intent to pursue legal action against Sony Group, the Japanese multinational, following the abrupt termination of their proposed merger deal. This deal, announced in 2021, aimed to amalgamate Sony's India operations through Culver Max Entertainment with Zee Entertainment, forming India's largest broadcasting entity.
Sony Group Corporation, through its subsidiary SPNI, issued a notice on Monday officially ending the definitive agreements related to the merger. The termination included a request for $90 million in termination fees from Zee, a demand that the Indian media company vehemently refutes.
Zee Entertainment, in a stock exchange filing, stated, "The company categorically refutes all claims and assertions made by Culver Max and BEPL regarding alleged breaches of the MCA by ZEEL, including their claims for the termination fee, and reserves all its rights in this matter."
Zee further asserted its commitment to safeguarding the long-term interests of stakeholders, expressing its intention to explore all available options, including legal avenues, to contest Culver Max and BEPL’s claims in the arbitration proceedings.
Zee-Sony merger leadership issues
During a detailed discussion at their January 22 board meeting, Zee revealed that despite multiple efforts to implement the merger scheme and extension discussions with Culver Max and BEPL, a resolution could not be reached. Punit Goenka, MD & CEO of ZEEL, expressed a willingness to step down in the interest of the merger, proposing various measures for the benefit of both companies.
However, these discussions failed to yield a viable proposal, leading to Sony's decision to terminate the agreement rather than pursue a modified scheme. Zee Entertainment is now evaluating its next steps, aiming to uphold the interests of its directors and shareholders in the face of this unexpected turn of events.
Also Watch: Sony-Zee merger called off: Sony ends talks with Zee due to dispute over leadership of merged entity