Zee Claims Rs 700 Cr In Merger Costs After Deal With Sony Fails

Amid the ongoing controversy, Zee Entertainment Enterprises paid about Rs 700 crore to fulfill Sony’s requirements to finish the merger agreement, according to a recent media report. In upcoming proceedings at the National Company Law Tribunal (NCLT), Subhash Chandra's firm is planning to seek compensation for the Japanese media giant, amounting to Rs 700 crore. 

Reportedly, Zee is going to present these arguments before the NCLT bench to refute Sony’s notice of termination and seek damages of USD 90 million.

On 22 January, Japan’s Sony Group officially terminated the proposed merger with Zee Entertainment Enterprises. In an official statement, Sony Pictures Entertainment mentioned, “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."

Sony in the statement added that it is committed to growing its presence in India's vibrant and fast-growing market and delivering world-class entertainment to Indian audiences.

The breakdown of the deal can be attributed to the inability of the media giants to agree on leadership for the combined entity. Specifically, Sony was reluctant to have Punit Goenka from Zee at the helm. 

Talks had initially stalled on 10 November when Sony insisted that its executive lead the merged company instead of Goenka. The failure to reach an agreement by the extended deadline of 21 December ultimately derailed the merger.