On Tuesday, Zee Entertainment announced that it has successfully settled all its disputes with two companies—Culver Max Entertainment Private Limited (which used to be known as Sony India) and Bangla Entertainment Private Limited. This settlement means that the issues between these companies have been fully resolved.
As part of the agreement, Zee Entertainment and the other parties involved will withdraw all the claims and applications they had filed at the Singapore International Arbitration Centre (SIAC). This withdrawal signifies that the legal matters between them have been put to rest.
Following this announcement, Zee Entertainment’s shares saw a substantial increase. The stock price initially rose by as much as 15% during the trading session. By the end of the day, Zee’s shares had closed 11.49% higher on the Bombay Stock Exchange (BSE), reaching a price of Rs 150.90. This rise in share price reflects positive investor sentiment in response to the settlement.
Zee Entertainment and Sony Resolve Merger Disputes
Zee Entertainment Enterprises has announced that it has reached an agreement with Sony to resolve all disputes related to their merger termination. This news led to a significant surge in Zee’s share price, which spiked by up to 15% on August 27. The stock hit an intraday high of ₹154.9 before settling at ₹147.7, still marking a 10% increase from the previous close.
In the settlement, Zee and Sony Pictures Networks India agreed to withdraw all claims against each other, ending ongoing arbitration at the Singapore International Arbitration Centre and related legal cases in the National Company Law Tribunal (NCLT) and other legal forums, according to Zee Entertainment’s statement.
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Zee and Sony Call Off $10 Billion Merger
The companies have decided to cancel their planned $10 billion merger. To make this official, they will withdraw their joint plans, known as Composite Schemes of Arrangement, from the National Company Law Tribunal (NCLT). They will also notify the relevant regulatory authorities about this decision. This step formally ends their plans to merge.
Both companies have agreed not to take any further legal action against each other regarding the merger or any of the related documents. This includes not making any new claims or counterclaims about how the deal was handled or ended.
As part of their agreement, they have decided to drop all claims, including a $90 million fee that was supposed to be paid when the merger was canceled. They will also not pursue any compensation for damages, legal fees, or other costs linked to the merger, such as those related to splitting up or closing down parts of their businesses.
Earlier in April, Zee withdrew its application from the NCLT to merge with Culver Max Entertainment. Zee did this to focus on making claims against Sony through arbitration at the Singapore International Arbitration Centre (SIAC) and other legal channels.
The merger between Zee and Sony, which was initially approved by the NCLT’s Mumbai bench on August 10, 2023, was set to create a major media company worth $10 billion. This new entity would have combined more than 70 TV channels, two streaming platforms (ZEE5 and Sony LIV), and two movie studios (Zed Studios and Sony Pictures Films India).
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FAQs
Q.1. Why did Zee Entertainment and Sony call off their $10 billion merger?
Ans. Zee and Sony decided to cancel their merger and resolve all related disputes through a settlement, agreeing to withdraw all legal claims against each other.
Q.2. How did Zee Entertainment’s share price react to the settlement announcement?
Ans. Zee’s share price surged by up to 15% during trading, eventually closing 11.49% higher on the Bombay Stock Exchange, reflecting positive investor sentiment.
Q.3. What was included in the settlement between Zee Entertainment and Sony?
Ans. The settlement involved both companies agreeing to withdraw all claims and legal actions, including those at the Singapore International Arbitration Centre (SIAC) and the National Company Law Tribunal (NCLT).
Q.4. What was the significance of the merger between Zee Entertainment and Sony?
Ans. The merger was initially planned to create a $10 billion media powerhouse, combining over 70 TV channels, two streaming platforms, and two movie studios.
Q.5. Will Zee Entertainment and Sony pursue any further legal action against each other?
Ans. No, both companies have agreed to drop all legal claims and counterclaims, officially ending their dispute and any future legal battles related to the merger.
