Sony Group Corporation has officially terminated the much-talked-about two-year pursuit of merging with Zee Entertainment Enterprises Limited. The proposed deal aimed to amalgamate TV and streaming ventures in India under the ZEE umbrella. The news was confirmed on Monday, January 22, 2024.
Sony terminates $10 billion merger with Zee Entertainment; seeks fee of $90 million on alleged breaching of the deal: Reports
After notifying the Tokyo Stock Exchange of the termination of the proposed merger, an official statement from Sony Pictures Entertainment read, “Culver Max Entertainment (CME) today issued notice to Zee Entertainment Enterprises Ltd. (ZEEL) terminating the agreement dated December 22, 2021, to merge ZEEL and CME. 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 the closing conditions of the merger were not satisfied by the end date. We remain committed to growing our presence in this vibrant and fast-growing market and delivering world-class entertainment to Indian audiences.”
As per Variety, another statement from Sony Group read, “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] 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 Group’s statement also read that it “does not anticipate any material impact on its consolidated financial results as a result of the termination of the definitive agreements for the merger.”
Meanwhile, ZEE, in response, released their statement that read, “ZEEL’s Board of Directors is evaluating all the available options. Basis the guidance received from the board, ZEEL will take all the necessary steps to protect the long-term interests of all its stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL’s claims in the arbitration proceedings. ZEEL has displayed utmost commitment towards the merger by undertaking several permanent and irreversible steps, resulting in one-time and recurring costs for ZEEL. Despite this, the company will continue to evaluate organic and inorganic opportunities for growth, leveraging the intrinsic value of its assets.”
Sony planned a $10 billion merger with Zee but now claims Zee breached the deal, seeking $90 million. In their statement, Zee has denied wrongdoing and rejected Sony’s claims, stating they upheld the merger agreement. Initially, Sony was said to pay $100 million if the merger fell through, but now they’re demanding $90 million from Zee.
Back in December 2021, Sony and ZEE signed definitive agreements to merge ZEEL with and into SPNI and combine their linear networks, digital assets, production operations and program libraries. The agreements followed the conclusion of an exclusive negotiation period during which ZEEL and SPNI conducted mutual due diligence. After closing, the new combined company was to be publicly listed in India. The closing of the transaction was subject to certain customary closing conditions, including regulatory, shareholder, and third-party approvals.
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