Zee, Sony settle disputes over failed merger, withdraw claims against each other

NEW DELHI: Zee Entertainment Enterprises Ltd and Sony Pictures Networks India on Tuesday said they have settled their disputes related to the failed USD 10-billion merger and agreed to withdraw all claims against each other.

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 and entertainment landscape, signifying the definitive conclusion of all disputes, the two companies said in a joint statement.

Zee Entertainment Enterprises Ltd and Culver Max Entertainment Pvt Ltd (CMEPL) have arrived at a comprehensive non-cash settlement, amicably resolving all disputes related to the merger cooperation agreement and the composite scheme of arrangement, it said.

“As part of the settlement, the companies (Zee and Sony Pictures Networks India) 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 and other forums,” Zee said in a statement Tuesday.

Under the agreement, the companies have mutually agreed to withdraw all respective claims against each other, in the ongoing arbitration at the Singapore International Arbitration Centre (SIAC), and all related legal proceedings initiated in the National Company Law Tribunal (NCLT) and other forums, it added.

The companies will also withdraw the respective composite schemes of arrangement from the NCLT and inform the relevant regulatory authorities.

Earlier, in January this year, Sony Pictures Networks India terminated a USD 10 billion merger deal with Zee Entertainment, calling off a December 2021 agreement. Sony also sought a USD 90 million termination fee on account of alleged breaches by Zee of the terms of the merger.

In January this year, Sony had pulled out from the proposed USD 10-billion merger with Zee Entertainment Enterprises Ltd citing failure to meet certain “closing conditions” by the Indian firm.

In return, Zee also sought a termination fee of USD 90 million (Rs 750 crore) from SPNI and its entity Bangla Entertainment on May 23 for pulling the plug on the merger.

“Culver Max and Bangla Entertainment have failed to comply with their obligations under the merger pact. Therefore, the company has terminated the pact and called upon Culver Max and Bangla Entertainment to pay the termination fee,” Zee had said when it sought the payback.

In their statement released on Tuesday, the two said that under the terms of the settlement, none of the parties will have any outstanding or continuing obligations or liabilities to the other.

One of the main publicly stated reasons for calling off the deal was the lack of consensus over who would head the merged entity. While Zee chief executive Punit Goenka had earlier agreed to be at the helm of the merged company, Sony reportedly sought a reconsideration after Goenka came under a Sebi probe.

A major legal roadblock also came in the way of the merger after Indusind Bank dragged the company to the National Company Law Tribunal for a Rs 83.08 crore loan. The case was later settled outside.

After the merger was called off, Sony had initiated arbitration proceedings before the Singapore International Arbitration Centre claiming USD 90 million as a termination fee saying that Zee failed to satisfy merger conditions. This led Zee also to initiate legal action to contest the claims of Sony in the same arbitration court.