In exchange for cancelling the $10 billion transaction, Zee expects $90 million from Sony
The much-awaited $10 billion merger between Sony Pictures Networks India, which is currently referred to as Culver Max Entertainment Pvt. Ltd., and Zee Entertainment Enterprises Ltd. (ZEEL), along with its association with Bangla Entertainment Pvt. Ltd. (BEPL), was abruptly called off by Sony in January 2024.
In response to the cancellation of the $10 billion merger deal in January, Zee Entertainment Enterprises Ltd. (ZEEL) has demanded a termination fee of $90 million (about Rs. 750 crores) from Sony Pictures Networks India, which is currently operating as Culver Max Entertainment Pvt. Ltd., and its subsidiary Bangla Entertainment Pvt. Ltd. (BEPL) on May 23.
“BEPL and Culver Max have not complied with their MCA-mandated requirements. As a result, the business has terminated the MCA and demanded that Culver Max and BEPL pay the termination charge or the total sum required by the MCA, which is equal to $90 million,” the statement stated.
Sony Group Corporation (SGC) had earlier, on January 22, 2024, declared that ZEEL had not complied with the merger requirements and had commenced arbitration proceedings before the Singapore International Arbitration Centre (SIAC), requesting a termination fee of $90 million.
ZEEL challenged this before the SIAC, which rejected the Sony group’s request for any temporary respite from the Indian broadcaster. ZEEL had filed a motion with the National Company Law Tribunal to force the proposed merger into effect, but it later dropped that motion.
The termination will severely impact Zee’s finances because the business has already paid over Rs. 400 crore in merger-related costs. Zee must now take steps to reduce costs and increase profitability in light of the abrupt end. These steps, which include organizational reorganization and rationalization, are intended to ease the company’s financial burden and set it up for long-term stability.
With over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), this combination may have produced a $10 billion media company that would have grown to become the biggest entertainment network in India.
