Indian media giant Zee Entertainment Enterprises Limited (ZEEL) announced on Wednesday that it is taking legal action against Japanese tech giant Sony over the abrupt termination of their high-profile $10 billion merger. Zee Entertainment has not only urged Sony to reconsider the merger but has also filed a lawsuit against the company.
Earlier this week, Sony unilaterally called off the merger, citing alleged breaches by Zee Entertainment of the terms of the merger cooperation agreement. The termination prompted Sony to seek a substantial $90 million breakup fee from Zee Entertainment. According to Zee, Sony is invoking arbitration and pursuing interim reliefs against them.
Zee, a significant media presence in India, owns multiple TV channels, a movie studio, and a local streaming service. The merger with Sony was anticipated to create a media powerhouse with a formidable market presence.
In response to Sony’s claims, Zee Entertainment issued a filing denying Sony’s entitlement to terminate the merger agreement. The company stated that Sony’s claim for a termination fee is “legally untenable and has no basis whatsoever.” Zee accused Sony of being in default of their obligations and called on the Japanese tech giant to withdraw the termination and confirm its commitment to completing the deal.
Read more: Zee-Sony Merger To Close Next Year Says CEO
Despite multiple attempts to reach out to Sony’s European representatives for comment, they were not immediately available when contacted by CNBC on Wednesday.
It is noteworthy that Zee Entertainment reportedly faced limitations in seeking a penalty fee over the termination due to the timing of Sony’s decision to call off the transaction.
In a statement on Wednesday, Zee Entertainment categorically refuted all claims made by Culver Max and BEPL regarding alleged breaches of the merger cooperation agreement, including the claims for the termination fee. The company asserted that it reserves all its rights in this matter, setting the stage for a potentially protracted legal battle between the media conglomerate and the Japanese tech giant.