Highlights

  • Sony terminated merger deal with Zee on January 22
  • Sony demands $90 million termination fee from Zee
  • Zee's founder threatens criminal action against Sony

Latest news

Indian killed in Hezbollah attack in Israel: who was Patnibin Maxwell?

Indian killed in Hezbollah attack in Israel: who was Patnibin Maxwell?

Taylor Swift Eras Tour: Singapore PM defends securing exclusive concert rights

Taylor Swift Eras Tour: Singapore PM defends securing exclusive concert rights

Union Minister of Electronics and IT Ashwini Vaishnaw meets with Google and Startup community

Union Minister of Electronics and IT Ashwini Vaishnaw meets with Google and Startup community

Lava Blaze Curve 5G launched: Check price in India, specs, sale date

Lava Blaze Curve 5G launched: Check price in India, specs, sale date

'Give $2.5 million or...': Karnataka CM, Deputy CM get bomb threat email

'Give $2.5 million or...': Karnataka CM, Deputy CM get bomb threat email

Haryana: Swedish defence firm Saab starts construction of plant in Jhajjar

Haryana: Swedish defence firm Saab starts construction of plant in Jhajjar

Haryana govt opens 'Kshatipurti Portal' for crop damage claims

Haryana govt opens 'Kshatipurti Portal' for crop damage claims

Ramadan 2024: Follow these 10 essential health tips to have a healthy month long fasting

Ramadan 2024: Follow these 10 essential health tips to have a healthy month long fasting

Zee-Sony merger deal fallout; Here's everything you need to know

Amidst the fallout of the Zee-Sony merger deal, Zee's founder Subhash Chandra has threatened criminal action against Sony, even as a section of shareholders has asked the board to make the termination letter by Sony public 

Zee-Sony merger deal fallout; Here's everything you need to know

Two-years of intense negotiation on the eagerly awaited Zee-Sony merger came to an end when Sony terminated the proposal on January 22. What followed was a series of legal threats from Zee and $90 million termination fee demand by Sony.

"Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline. After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date," Sony said in its statement issued on January 22.

At the heart of the merger's failure was the inability of the parties to reach a consensus on who would be heading the merged entity. Reports suggested that Zee wanted its CEO and MD Punit Goenka to lead the newly formed firm while Sony wanted its CEO N P Singh to preside at its helm.

Meanwhile, tensions continued to rise as capital markets regulator SEBI imposed a ban on Zee's Punit Goenka prohibiting him from holding any managerial position during an investigation into allegations of fund siphoning. Eventually, SEBI lifted the ban. However, Sony continued to have reservations on giving the reins to Goenka.

The Zee-Sony merger

The proposed merger aimed to create a formidable 74-channel media giant, granting Sony a substantial market share in Indian media landscape. Sony committed to invest $1.6 billion, expecting to hold 53% in the combined entity. The merged entity was poised to become India's fourth-largest media company behind Google, Meta and Disney-Star.

Also Read: Sony-Zee merger called off: Sony ends talks with Zee due to dispute over leadership of merged entity

The original merger agreement also included a provision for a substantial $100 million penalty if either party chose to walk out. However, this clause became null and void after the expiration of the December 21 deadline.

Legal battles ahead

The termination of deal has also led to legal battles ahead. While Sony is seeking a $90 million termination fee and has invoked arbitration and legal actions against Zee for alleged breaches, Zee has moved the National Company Law Tribunal (NCLT) and Singapore International Arbitration Centre (SIAC) against Sony Pictures Network India's termination of the merger deal.

Also Read: Zee moves NCLAT against Sony India's termination of merger deal

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.

Mint quoted media lawyers and said that the next steps in arbitration involve notifying the SIAC if the parties have already chosen arbitrators. If not, Sony will request the SIAC to set up the arbitration tribunal. The outcome of NCLT's decision will play a crucial role in the matter.

Meanwhile, Zee's founder Subhash Chandra in an interview to the Economic Times has accused Sony of intentionally scuttling the deal, questioning Sony's intent behind the now scrapped $10 billion deal despite his firm's offer to have Punit Goenka step aside from the CEO's post. He also went on to threaten criminal action against Sony.

In the interview, Chandra claimed that Zee met all the terms laid out in the deal and it was Sony's "strategy all along to engage with Zee and eventually withdraw, portraying Zee as vulnerable".

Shareholders demand transparency

Anticipating a long legal battle, a section of Zee's public shareholders have reportedly written to the company seeking details of the chain of events that led to the termination of the merger agreement with Sony Pictures Network. As per Moneycontrol, in a letter addressed to R Gopalan, Chairman of board, the shareholders, comprising foreign portfolio investors (FPI), mutual funds and retail investors, have asked for the contents of Sony’s termination letter to be made public.

The shareholders have also questioned the board of as to why it did not present the true picture of the negotiations with Sony. Meanwhile, the Zee-Sony merger collapse has led to a decline in the Zee shares which have gone down about 32% in the last 5 days.


Up Next

Zee-Sony merger deal fallout; Here's everything you need to know

Zee-Sony merger deal fallout; Here's everything you need to know

Union Minister of Electronics and IT Ashwini Vaishnaw meets with Google and Startup community

Union Minister of Electronics and IT Ashwini Vaishnaw meets with Google and Startup community

Tesla shares tumble over 7% after sales fall in China

Tesla shares tumble over 7% after sales fall in China

Reliance-Disney merged entity to capture more than 50% of market share: Report

Reliance-Disney merged entity to capture more than 50% of market share: Report

Income Tax department asks taxpayers to submit revised ITRs for AY 2021-22 by March 31

Income Tax department asks taxpayers to submit revised ITRs for AY 2021-22 by March 31

RBI crackdown: IIFL's Nirmal Jain calls action harsh, says no governance concerns

RBI crackdown: IIFL's Nirmal Jain calls action harsh, says no governance concerns

More videos

Indian investment in UAE, European real estate spikes amidst attractive rental yields

Indian investment in UAE, European real estate spikes amidst attractive rental yields

Government unveils 'Chakshu' and 'DIP' portal to combat online fraud menace

Government unveils 'Chakshu' and 'DIP' portal to combat online fraud menace

EU commission slaps Apple with $2 billion fine over App store rules

EU commission slaps Apple with $2 billion fine over App store rules

Zerodha fund house surpasses ₹500 crore AUM, attracts 1 lakh investors in 3 months

Zerodha fund house surpasses ₹500 crore AUM, attracts 1 lakh investors in 3 months

IIFL Finance shares dive 20% following RBI ban on gold loan disbursement

IIFL Finance shares dive 20% following RBI ban on gold loan disbursement

Jeff Bezos surpasses Elon Musk as world's richest person amidst Tesla's 7.2% stock fall

Jeff Bezos surpasses Elon Musk as world's richest person amidst Tesla's 7.2% stock fall

Gold, Silver Price Today March 05, 2024: Check Latest Rates in Mumbai, Delhi, Chennai, Bengaluru

Gold, Silver Price Today March 05, 2024: Check Latest Rates in Mumbai, Delhi, Chennai, Bengaluru

Gold, Silver Price Today March 04, 2024: Check Latest Rates in Mumbai, Delhi, Chennai, Bengaluru

Gold, Silver Price Today March 04, 2024: Check Latest Rates in Mumbai, Delhi, Chennai, Bengaluru

Ex-Twitter execs sue Musk for unpaid severance

Ex-Twitter execs sue Musk for unpaid severance

RBI approves interoperable payment system to boost digital transactions

RBI approves interoperable payment system to boost digital transactions

Editorji Technologies Pvt. Ltd. © 2022 All Rights Reserved.