Sony terminates deal with Zee over alleged breaches
The founder family of Zee Entertainment Enterprises Ltd, India’s largest private broadcaster, has announced its intention to raise its stake in the company to 26% from the current 4%, following the termination of a $10 billion merger deal with Japan’s Sony Group Corp last week.
The merger deal, which was first announced in September 2021, would have created one of the world’s largest media and entertainment conglomerates, with a combined revenue of over $4 billion and a presence in 170 countries. However, the deal fell apart after two years of negotiations, amid allegations of breaches of the terms of the agreement by Zee, which the Indian company has denied.
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Sony has sought $90 million in termination fees from Zee, claiming that the Indian company failed to meet certain financial and operational milestones, as well as disclose material information related to its business. Zee has rejected these claims, saying that they are baseless and motivated by Sony’s desire to renegotiate the deal terms in its favor.
Zee founder family to buy back shares and support management
The founder family of Zee, led by Subhash Chandra, has said that it will exercise its right to buy back up to 22% of the company’s shares from the open market, as per the original agreement with Sony. The family has also said that it will continue to support the management and the board of Zee, and work towards enhancing the value of the company for all its stakeholders.
The family has expressed its confidence in the growth prospects of Zee, which operates over 40 television channels, a digital platform called Zee5, and a movie production and distribution arm. Zee has a dominant position in the Indian entertainment market, with a reach of over 1.3 billion viewers across 19 languages.
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The family has also said that it is open to exploring other strategic opportunities for Zee, including partnerships, alliances, and investments, that can help the company achieve its vision of becoming a global media powerhouse. The family has said that it will act in the best interests of the company and its shareholders, and abide by all the applicable laws and regulations.
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