Zee demands $90 million termination fee from Sony for merger cancellation

Zee Entertainment Enterprises Ltd. has demanded a termination fee of $90 million (around Rs 748.7 crore) from Sony Group for canceling the $10 billion merger deal in January this year. It sought termination fees from two Sony Group entities: Sony Pictures Networks India, now known as Culver Max Entertainment, and Bangla Entertainment, according to a regulatory filing filed by Zee Entertainment Enterprises on Thursday.

ZEEL has, due to violations by Culver Max and BEPL under the Merger Cooperation Agreement, terminated the MCA by sending a letter dated May 23, 2024. The company requested a termination fee from Culver Max and BEPL under the provisions of the MCA, she said.

“Culver Max and BEPL have failed to comply with their obligations under the MCA. Therefore, the Company terminated the MCA and requested Culver Max and BEPL to pay termination fees, a total amount equal to $90 million in accordance with the MCA,” it said.

Earlier on January 22, 2024, Sony Group Cor. had declared that ZEEL did not meet the terms of the merger and initiated arbitration proceedings before the Singapore International Arbitration Centre, seeking $90 million as termination fees.

This decision was challenged by ZEEL before the SIAC, which refused any interim measure to the Sony group against the Indian broadcaster.

ZEEL had moved the National Company Law Tribunal to implement the proposed merger and later withdrew its plea.

“We hereby wish to inform you that the Company has, due to Culver Max and BEPL’s breaches under the MCA, terminated the MCA by issuing a letter dated May 23, 2024 and requested a termination fee from Culver Max and BEPL in accordance with the provisions of the MCA,” the filing said.

ZEEL and SPNI had entered into a merger agreement on December 22, 2021.

On August 10, 2023, the NCLT bench in Mumbai approved the proposed merger of ZEEL with Sony group entities Culver Max Entertainment and BEPL, which could have created a $10 billion media entity.

However, two years later, Sony Corporation announced the termination of the agreement on January 22, 2024.