Zee-Sony merger deal fallout: Zee can go to India tribunal to enforce Sony merger deal
Zee-Sony merger deal fallout: Zee Entertainment has announced it’s free to seek the enforcement of a $10 billion merger with Sony’s Indian unit through an Indian tribunal, following the rejection of an emergency petition by Sony at the Singapore International Arbitration Centre (SIAC), on February 4, as reported by Reuters.
Sony had terminated the merger on January 22, citing breaches of contract, thereby ending a deal that could have led to the creation of one of India’s largest TV broadcasters. In response, Zee firmly rejected these claims and is now looking to an Indian tribunal to order Sony to fulfill its obligations and complete the merger.
According to Zee’s filings to Indian stock exchanges, the SIAC asserted that it lacked the jurisdiction to prevent Zee from approaching the Indian tribunal, stating that the merger fell within the purview of the National Company Law Tribunal of India.
Sony expressed disappointment in a statement, clarifying that the decision was procedural and focused solely on whether Zee could proceed with its application to the company law tribunal. Sony plans to vigorously arbitrate the matter in Singapore before a full SIAC tribunal, maintaining its commitment to uphold Sony India’s right to terminate the merger agreement and pursue remedies, including a termination fee.
“We will continue to vigorously arbitrate the matter in Singapore in front of a full SIAC tribunal and pursue SPNI’s (Sony India) right to terminate the merger agreement and seek a termination fee and other remedies,” it added. “We remain confident in the merits of our position in both Singapore and India.”
Despite the setback, Sony remains confident in the merits of its position in both Singapore and India. The proposed Zee-Sony merger, in progress for two years, aimed to create a formidable Indian TV entity with over 90 channels spanning sports, entertainment, and news. The termination of the merger by Sony also cited alleged non-compliance by the Indian media company with certain financial terms, disputes over disposal of Russian assets, and issues related to a $1.4 billion Disney cricket rights deal, as reported by Reuters last week.
(With Inputs from Reuters)
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Published: 05 Feb 2024, 06:55 AM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.