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Zee, Sony amicably settle disputes over failed merger, withdraw claims | Company News

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Sony, Zee, Sony-Zee merger

In December 2021, ZEEL and SPNI announced a merger creating an entertainment giant that subsequently got approval from the Competition Commission of India (CCI) and NCLT in the following years. Photo: Bloomberg


Zee Entertainment Enterprises (ZEEL) and Culver Max Entertainment, operating as Sony Pictures Networks India (SPNI) together with its group company Bangla Entertainment, said they have arrived at “a non-cash settlement, amicably resolving all disputes” over the merger co-operation agreement and the composite scheme of arrangement between the parties, according to the company’s joint statement issued on Tuesday.


ZEEL’s shares jumped as much as 15 per cent after this announcement. ZEEL’s stock price rose to Rs 154.9 per piece on NSE during the day and closed at Rs 150.9 per piece, which was still 10 per cent higher than the previous day’s closing price.


“As part of the settlement, the companies have mutually agreed to withdraw all respective claims against each other in the ongoing arbitration at the Singapore International Arbitration Centre, and all related legal proceedings initiated in the National Company Law Tribunal (NCLT) and other forums,” the statement said.


The companies also added, “The companies will withdraw the respective Composite Schemes of Arrangement from the NCLT and inform the relevant regulatory authorities.”


The terms of the settlement state that none of the parties will have any outstanding or continuing obligations or liabilities to the other. The companies also noted that the settlement stems from a mutual understanding to independently pursue future growth opportunities with a renewed purpose and focus on the evolving media and entertainment landscape, signifying the definitive conclusion of all disputes.


In December 2021, ZEEL and SPNI announced a merger creating an entertainment giant that subsequently got approval from the Competition Commission of India (CCI) and NCLT in the following years.


However, in October 2023, the Securities Appellate Tribunal (SAT) quashed the Securities and Exchange Board of India’s (Sebi) order restricting Punit Goenka from holding the post of managing director and chief executive officer of ZEEL. This was followed by continued talks between the companies to salvage the deal.


Earlier this year, SPNI officially notified ZEEL of the decision to call off the merger. This was followed by the wholly-owned subsidiary of Sony Group Corporation of Japan seeking $90 million in termination fees from ZEEL.


ZEEL too had sought a termination fee of $90 million from SPNI and its entity Bangla Entertainment in May.


If the merger had gone through, the merged entity would have created a $10 billion entertainment giant with a market share of 25 per cent among general entertainment channels.

First Published: Aug 27 2024 | 7:33 PM IST

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