Zee, Sony settle all disputes; terminate $10-bn deal; share up 13%

Media and entertainment company ZEE and Sony Pictures have resolved all legal disputes "amicably" by reaching a non-cash settlement after their $10-billion merger deal fell through in January 2024. The development comes after Zee withdrew its merger implementation application against the Sony group from the National Company Law Tribunal in April 2024. ZEE had dragged Sony to court in January 2024, after the mega merger deal collapsed and had sought directions on the Composite Scheme of Arrangement between ZEE, Culver Max Entertainment, and Bangla Entertainment.

"ZEE Entertainment Enterprises Ltd. (ZEE), Culver Max Entertainment Pvt. Ltd. (CMEPL) operating as Sony Pictures Networks India (SPNI), together with its group company Bangla Entertainment Pvt. Ltd. (BEPL), have arrived at a comprehensive non-cash settlement, amicably resolving all disputes related to the Merger Co-operation Agreement and the Composite Scheme of Arrangement," Zee says in an exchange filing today.

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.

Zee says they will also withdraw the respective Composite Schemes of Arrangement from the NCLT and inform the relevant regulatory authorities."Under the terms of the settlement, none of the parties will have any outstanding or continuing obligations or liabilities to the other."

Zee says the settlement stems from a mutual understanding between the companies to independently pursue future growth opportunities with a renewed purpose and focus on the evolving media & entertainment landscape, signifying the definitive conclusion of all disputes.

On January 22, 2024, the Japanese entertainment behemoth Sony Group Entities ended two-year-long merger negotiations with ZEE, citing the inability of the latter to fulfil the merger agreement. Sony also approached the international arbitration court and sought a termination fee worth $90,000,000 for "alleged breaches" by ZEE. The $10-billion deal, initially announced in December 2021, would have created the country’s largest entertainment network with more than 70 entertainment channels giving an edge to its rivals such as Hotstar, Amazon Prime and Jio Cinema.

Zee recorded a profit of ₹13.4 crore in the March quarter of FY24, compared with a loss of ₹196 crore in the corresponding period last year. The company saw a 2.7% year-over-year (YoY) increase in operating revenue, reaching ₹2,169.9 crore in Q4FY24, from ₹2,112.1 crore in Q4FY23.

Zee shares surged 13% during the intra-day trade today, touching ₹154.65 on the BSE. The shares at the current price of ₹149.85 (2.15 pm), Zee's m-cap stands at ₹14,383.78 crore.