Sony Pictures Networks India is seeking a termination fee of $90 million after pulling out of a $10 million agreement to merge its TV and streaming businesses in India with those of ZEE Entertainment.
“After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date,” said a statement issued by Sony in India. “Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline.”
No reasons were given by Sony for the break up, but has been known for several months that Sony and ZEE have been unable to agree on a number of issues including who would lead the combined company.
ZEE has put forward current CEO Punit Goenka, but Sony had raised concerns over Goenka’s financial conduct following allegations from the Securities and Exchange Board of India implying Goenka and his father, the founder of ZEE Subhash Chandra, had abused their corporate positions to move funds from the company into private ventures.
In a statement, ZEE said Punit Goenka had been willing to step down in the interest of the merger, and the company would put other legal measures in place.
ZEE has signalled its intention to contest Sony’s claim and says the board has complete faith in the management of the company.
