Zee, Sony India Settle Disputes Over Terminated $10 Billion Mega Merger, Stock Jumps 15%

Zee Entertainment has negotiated an agreement with Culver Max Entertainment Private Limited (CMPEL), formerly known as Sony India, and Bangla Entertainment Private Limited (BEPL) to settle all disputes, including withdrawing all applications, claims before the Singapore International Arbitration Centre.

Under the settlement, the companies will withdraw their respective Composite Schemes of Arrangement from the National Company Law Tribunal (NCLT) and inform the relevant regulatory authorities about the termination of $10 billion mega merger.

Following the agreement, Zee Entertainment Enterprises stock reached an intraday high of Rs 154.9 in the afternoon, which is a 15 per cent increase from the previous closing price.

The stock settled 10 per cent higher at Rs 147.7 on the National Stock Exchange (NSE).

This event comes after Zee Entertainment Limited (ZEE) announced that it will withdraw the merger implementation application filed in the National Company Law Tribunal (NCLT), Mumbai bench against Culver Max Entertainment (Sony).

The decision would allow the company "to continue to aggressively pursue" all of its claims against Sony in the course of the ongoing arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and in other forums.

In addition, the settlement would allow the companies giving up all their rights to file claims and counterclaims against each other about the termination and implementation arising out of the transaction documents.

The settlement would also reportedly taking back the $90 million claims concerning termination fees, damages, litigation and other costs incurred. It would withdraw all claims to for costs of disposition hive-off, spin-off, winding-up, liquidation, closure of business and or any other assets.

Zee's plan to merge with BEPL AND Culver Max Entertainment was approved by the Mumbai bench of NCLT on August 10, 2023.

If the merger had gone through, it would have led to the joint venture using more than 70 channels, two video streaming platforms (ZEE5 and Sony LIV), and two movie studios (Zed Studios and Sony Pictures Films India). This would have resulted in a merger worth USD 10 billion.

However, the merger was reportedly scrapped due to ZEE's failure to meet certain terms of the agreement and to formulate a strategy to set right the merger.