Zee approaches NCLT against Sony’s decision to call off $10 billion merger deal

NEW DELHI: Zee Entertainment on Wednesday moved National Company Law Tribunal and the Singapore International Arbitration Centre against Sony’s decision to terminate the $10 billion merger between its local unit and the broadcaster.
Zee said that it has initiated legal action to counter Sony’s accusations of breach of agreements in arbitration proceedings before the Singapore International Arbitration Centre.
The merger would have created a platform against global giants like Netflix and Amazon as well as JioCinema-owned by Reliance Industries, which is currently in talks with Disney.
The company has sought guidance from the National corporation Law Tribunal for on how to carry out the merger.
“The company has complied with all its obligations in good faith,” Zee said in a regulatory filing.
Sony Corp’s 62-page merger termination notice came just when Zee had requested it to extend the deal deadline. While Sony cited unmet merger conditions as the reason for the termination, the two companies have been wrangling over who will lead the combined entity.
Zee proposed MD Punit Goenka would be at the helm, but Sony disagreed in the light of a regulatory investigation against him and wanted its nominee, India MD N P Singh, to run the show. The Japanese giant has sought $90 million from Zee as termination fees for breaches of the merger pact and has invoked arbitration.
“After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied… We remain committed to growing our presence in (India’s) vibrant and fast-growing market,” said Sony. It, however, didn’t specify what conditions were unfulfilled.
Sony further said that even after the two-year deal timeline ended on December 21, 2023, it was engaged in “good faith discussions” with Zee for 30 days to make the merger effective but both “were unable to agree upon an extension by the Jan 21 deadline”.
Zee said Goenka had agreed to step down in the interest of the merger and had discussed the appointment of a director on the board of the combined company.

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