Zee Entertainment terminates $10 billion deal with Sony India
What's the story
Zee Entertainment has announced a settlement agreement with Culver Max Entertainment Private Limited (CMEPL), formerly known as Sony India, and Bangla Entertainment Private Limited (BEPL). The agreement aims to resolve all disputes, and withdraw all applications and claims before the Singapore International Arbitration Centre. This action effectively terminates a deal worth $10 billion. Following this announcement, Zee's shares saw an 11% increase, closing at ₹150.90 each today.
Deal termination
Both parties can't file claims against each other
The settlement involves the withdrawal of the Composite Schemes of Arrangement from the National Company Law Tribunal (NCLT). Both entertainment companies have agreed to give up all rights to file claims or counterclaims against each other, pertaining to transaction documents including their termination and implementation.
Claim withdrawal
Settlement includes withdrawal of all claims
The settlement also includes the withdrawal of all claims for a $90 million termination fee, litigation costs, damages, and other expenses. All claims related to the costs of disposition hive-off, spin-off, winding-up, liquidation or closure of business and/or any other assets are also part of this agreement. This comprehensive resolution aims to put an end to ongoing disputes between Zee Entertainment and Sony India.
Discontinuation
Zee's previous merger withdrawal
In April, Zee Entertainment had announced its decision to withdraw merger implementation application filed against Sony at the NCLT's, Mumbai bench. The company, led by Puneet Goenka, stated that this move would enable it "to continue to aggressively pursue" all of its claims against Sony in current arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and other forums.
Merger approval
NCLT had approved Zee-Sony merger in 2023
On August 10, last year the Mumbai bench of the NCLT had approved Zee's plan to merge with BEPL and Culver Max Entertainment, two Sony group firms. However, Sony called off the merger on January 22 due to Zee's failure to meet certain financial terms of the agreement, and devise a strategy for its rectification.