Zee Entertainment Limited (ZEEL) announced a settlement with Culver Max Entertainment Private Limited (CMEPL), formerly Sony India, and Bangla Entertainment Private Limited (BEPL). This agreement resolves all disputes and involves withdrawing all claims and applications from the Singapore International Arbitration Centre (SIAC).
Market Reaction
Following the announcement, Zee Entertainment’s shares saw an 11% increase, closing at Rs 150.90 each.
Termination of the $10 Billion Deal
As part of the settlement, the companies will withdraw their respective Composite Schemes of Arrangement from the National Company Law Tribunal (NCLT) and notify the relevant regulatory authorities, thus terminating the $10 billion merger deal.
Relinquishment of Claims
The settlement also includes a mutual agreement to forgo any claims or counterclaims related to the Transaction Documents, including their termination and implementation. This also covers the $90 million termination fee and all related costs, such as litigation and other expenses, as well as costs associated with the disposition, spin-off, or liquidation of assets.
Background on the Merger
Earlier in April, ZEEL had decided to withdraw its merger implementation application against Culver Max Entertainment at the NCLT Mumbai bench. This decision was made to allow ZEEL to continue pursuing its claims against Sony in ongoing arbitration at SIAC and other forums.
On August 10, 2023, the Mumbai bench of the NCLT had approved ZEEL’s plan to merge with BEPL and CMEPL. The merger would have created a media conglomerate valued at $10 billion, combining over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two movie studios (Zed Studios and Sony Pictures Films India). However, Sony called off the merger on January 22 due to ZEEL’s failure to meet certain financial terms, a move ZEEL alleged was done in “bad faith.”
