Zee demands $90 million termination fee from Sony for calling off their merger

24 May 2024 , 01:53 PM

Zee Entertainment stated that it has demanded Sony Group Corporation’s India media unit, Culver Max Entertainment, and Bangla Entertainment Pvt. Ltd. (BEPL) to pay a $90 million termination fee.

Culver Max and BEPL failed to meet their commitments under the MCA. As a result, the firm has terminated the MCA and requested that Culver Max and BEPL pay the termination fee, which is $90,000,000 in total, in accordance with the MCA, the company stated.

Previously, the media company announced that it spent ₹432 Crore in merger-related costs between 2023-24 and 2022-23 as a result of a failed media acquisition with Culver Max Entertainment.

Culver Max Entertainment terminated its merger deal with Zee Entertainment on January 22 due to leadership issues in the planned merged organisation and unmet closing conditions. The merger agreement, inked in December 2021, got all necessary approvals from the stock exchanges, the Competition Commission of India, and the National Company Law Tribunal.

Soon after the deal was terminated, Sony approached the Singapore International Arbitration Centre, seeking $90 million in termination fees from Zee Entertainment for a claimed breach of the merger agreement. In response to Sony’s complaint, Zee Entertainment stated that there would be no meaningful detrimental impact because both cases were untenable.

Since then, Zee has announced a spate of cost-cutting and loss-reducing actions, including the reduction of 15% of its workforce.

Zee Entertainment Enterprises reported a net profit of ₹13.35 Crore for the March quarter, compared to a loss of ₹196 Crore the previous year. Total income in the reporting quarter rose 3% year on year to ₹2,185 Crore. In the same quarter last year, the figure was ₹2,126 Crore.

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