ZEE-Sony Merger: Sony Group has officially told Zee Entertainment Enterprises Limited that it is considering canceling the merger plan of its Indian unit. According to Bloomberg report, the Japanese entertainment giant sent a letter to Zee on Monday morning. Is.
It is expected that she will disclose this to the exchange later. Sony cited incomplete terms as the reason for ending the merger with Zee. This merger, announced two years ago, faced trouble due to investigation by the Securities and Exchange Board of India (SEBI).
A complaint was filed in the National Company Law Appellate Tribunal (NCLT) against the merger of both Axis Finance and IDBI Bank. However, the tribunal had refused to stay the merger of the two companies. The reason for canceling the merger decision is said to be the delay in the deal. This matter is stuck for two years. This merger is said to be worth around $10 billion.
Sony cited incomplete terms as the reason for canceling the deal. According to the report, the merger is due to a standoff between the companies over the leadership of the property. The case specifically involves Zee CEO Punit Goenka, who is being investigated by capital markets regulator SEBI. The merger of the two companies was aimed at creating a $10 billion media powerhouse capable of competing with global giants like Netflix Inc and Amazon.com Inc.
The agreement for the merger between Sony and ZEEL was signed in December 2021. Sony will indirectly hold the maximum stake of 50.86 percent in the newly formed giant media house. Whereas, Zee’s founders will hold 3.99 percent stake in the company. At the same time, Zee shareholders will hold 45.15 percent stake.
Indian broadcaster Zee Entertainment on Monday said it will take legal action against Japanese media giant Sony Group after the latter called off a $10 billion merger of their Indian operations, Reuters reported on January 22.
Earlier in the day, Sony called off the merger, which was announced two years ago, after they could not agree on some deal terms, and has also asked for a $90 million termination fee from Zee.
Sony said in a statement, “The Merger was not consummated as of the Buy End Date because the customary conditions to the Merger had not been satisfied at that time. Sony Pictures Networks India Pvt. Ltd. (SPNI) has held discussions in good faith to extend the end date, but the discussion period has ended without consent to the extension of the end date. As a result, on January 22, 2024, SPNI issued a notice to GEEL for termination of the standing agreement.
Soni also said, “The Standing Agreement provided that if the Merger is not consummated by the date (the End Date) twenty-four months after their Signature Date, then Police and the Agreement will have the right to extend the End Date for such time as is necessary to effect the signing of the Agreement.” But it will be discussed for good.”
Sony’s termination letter also came after the thirty-day deadline expired when the two parties could not agree on an end date for the settlement.