Zee wants $90 mn termination fees from Sony

Zee Entertainment Enterprises (ZEEL) is seeking a termination fee of $90 million (an estimated Rs 748.7 crore) from the Sony Group for calling off their $10 billion merger deal in January this year. ZEEL has asked for the fee from two Sony Group entities including Sony Pictures Networks India (now Culver Max Entertainment) and Bangla Entertainment (BEPL).

According to a regulatory filing, the company terminated the Merger Cooperation Agreement (MCA) on May 23, 2024, due to breaches by Culver Max and BEPL. ZEEL claims that these entities failed to meet their obligations under the MCA, leading to the termination and the demand for the termination fee.

In January 2024, Sony Group Corporation initiated arbitration proceedings before the Singapore International Arbitration Centre (SIAC), claiming a $90 million termination fee from ZEEL, stating that ZEEL did not satisfy the merger conditions. ZEEL contested this at SIAC, which denied Sony's request for interim relief.

ZEEL had initially sought implementation of the merger through the National Company Law Tribunal (NCLT) but later withdrew its plea. ZEEL and SPNI had agreed to merge on December 22, 2021, and received approval from the NCLT on August 10, 2023. However, Sony Corporation announced the termination of the agreement on January 22, 2024.