Zee demands $90 million fee from Sony after $10 billion merger collapse

In a regulatory filing Friday, Zee said it formally notified Sony Pictures Networks India (now renamed Culver Max Entertainment) and Sony’s Bangla Entertainment subsidiary that it was terminating their merger cooperation agreement. This was due to the Sony entities allegedly breaching their obligations.

Zee Entertainment Enterprises Ltd. has slapped Sony Group with a demand for a whopping $90 million termination fee, escalating the acrimonious fallout from the collapse of their envisioned $10 billion media mega-merger.

In a regulatory filing Friday, Zee said it formally notified Sony Pictures Networks India (now renamed Culver Max Entertainment) and Sony’s Bangla Entertainment subsidiary that it was terminating their merger cooperation agreement. This was due to the Sony entities allegedly breaching their obligations.

Citing violation of the agreement terms, Zee said it has now called upon Sony to pay the $90 million breakup fee stipulated if the deal fell apart.

The dramatic turn of events marks an about-face from January, when it was Sony that first moved to exit the deal and initiated arbitration proceedings in Singapore demanding the same $90 million termination fee from Zee. At the time, Sony claimed Zee failed to satisfy certain merger conditions.

However, the Singapore tribunal denied interim relief to Sony against the Indian broadcaster. Zee, which had originally petitioned to implement the proposed merger before India’s company courts, later withdrew that application as well.

The two media giants announced their mega-merger in late 2021, aiming to create a television powerhouse spanning entertainment, sports and digital platforms across South Asia. But the deal steadily unravelled amid feuding over restructuring terms and alleged corporate governance lapses.

Zee’s move to now force Sony to pay the windfall termination fee sets the stage for a protracted legal battle over the merger’s demise. Both sides had invested significant capital in getting the deal across the finish line before it dramatically fell apart.

With neither willing to back down, the collapse has devolved into a high-stakes corporate gunfight with billions at stake – underscoring the merger’s bitterly contested endgame.