Indian broadcaster Zee Entertainment said on Monday it will take legal action against Sony Group after the Japanese media company terminated a $10 billion merger of their India operations, Reuters reported on 22 January.
Earlier in the day, Sony ended the merger, which was announced two years ago, as they could not agree on some deal conditions, and has also sought $90 million in termination fees from Zee.
Sony, in a statement, said, “The Merger did not close by the End Date as, among other things, the closing conditions to the Merger were not satisfied by then. Sony Pictures Networks India Private Ltd (SPNI) has been engaged in discussions in good faith to extend the End Date but the Discussion Period has expired without an agreement upon an extension of the End Date. As a result, on January 22, 2024, SPNI issued a notice to ZEEL terminating the definitive agreements.”
Sony also said, “The definitive agreements provided that if the Merger did not close by the date twenty-four months after their signature date (the “End Date”), the parties would be required to discuss in good faith an extension of the End Date required to make the Merger effective by a reasonable period of time.”
The termination letter from Sony also came after a 30-day grace period ended over the weekend when the two sides couldn’t reach an agreement on a deadline set in late December.
Earlier on 19 January, it was reported that Sony is set to pull the plug on the proposed $10-billion merger of its India unit with Zee Entertainment after more than two years of negotiations.
The deal unravelled as the media giants failed to agree on who would lead the combined entity, with the Japanese conglomerate disinclined to have Zee’s Punit Goenka at the helm, said two people with direct knowledge of the developments.
On 10 November, Mint was the first to report that the talks had stalled after Sony’s demand that its executive lead the merged entity instead of Goenka, and that failure to reach an agreement by 21 December could derail the merger. The two companies extended the deadline by a month but failed to iron out their differences.