Sony’s plan to merge with Zee Entertainment, the Indian media company, has fizzled.
According to the BBC, the reported $10 billion merger, which was supposed to take place last Friday, was scrapped because Sony said merger conditions were not met. Specifically, the company said “among other things, the closing conditions to the merger were not satisfied by then.”
Zee has said that it can take legal action against Sony for this plan change.
There have also been reports that there were disagreements over leadership. The original plan was for Zee chief executive Punit Goenk to head the merged company. However, following an investigation by India’s Securities and Exchange Board (SEBI), Sony was unhappy with the arrangement. In the summer of 2023, Goenka and Subhash Chandra, the chairman emeritus, were suspended from holding any managerial or directorial positions while the SEBI investigated allegations into insider trading.
Zee said that Sony was seeking a $90 million termination break in a statement from the company’s board meeting on Monday. This fee is due to alleged breaches by Zee Entertainment Enterprises Limited of the terms of the merger co-operation agreement.
The statement goes on to read that Zee “categorically refutes all claims and assertions” made by Culver Max Entertainment Pvt. Ltd., which was formerly Sony Pictures Networks India Private Limited, and Bangla Entertainment Pvt. Ltd. This includes the Sony’s claims for a termination fee and Zee “reserves all its rights in this matter.”
Zee has said that it’s “evaluating all the available options” and that it will take “all the necessary steps to protect the long-term interests of all its stakeholders, including by taking appropriate legal action.” Goenka has also been “agreeable” to step down in the interest of the merger.
