ZEE Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India announced on Tuesday that they have settled their six-month-long dispute related to the failed £7.6-billion merger. Both companies have agreed to withdraw all claims against each other.
As part of the "comprehensive non-cash settlement" between ZEEL and Culver Max Entertainment Pvt Ltd (CMEPL), both parties will withdraw all respective claims 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, according to a joint statement.
Additionally, the companies will withdraw the respective Composite Schemes of Arrangement from the NCLT and notify the relevant regulatory authorities.
Both ZEE and Sony had previously claimed a termination fee of £68 million (approximately £9.5 crore) from each other, alleging non-compliance with the Merger Cooperation Agreement (MCA) signed in December 2021. Sony initiated arbitration proceedings at the SIAC two days after the termination of the deal, claiming that ZEEL had not met the merger conditions and sought the termination fee.
ZEEL contested this claim at the SIAC, which did not grant any interim relief to Sony against the Indian broadcaster. ZEEL also approached the NCLT seeking implementation of the proposed merger but later withdrew its plea.
In May, ZEEL terminated the MCA with a letter dated May 23, 2024, and sought a termination fee of £68 million from Sony Pictures Networks India (SPNI), now known as Culver Max Entertainment, and Bangla Entertainment (BEPL).
Sony Pictures Networks India, the consumer-facing identity of CMEPL, is a wholly-owned subsidiary of Sony Group Corporation, Japan.
Under the terms of the settlement, neither party will have any "outstanding or continuing obligations or liabilities" to the other, as stated in the joint statement.
The settlement results from a mutual decision by the companies to independently pursue future growth opportunities in the evolving media and entertainment landscape, marking the end of all disputes.
Earlier this year, in January, Sony had withdrawn from the proposed £7.8-billion merger with ZEE Entertainment, citing the failure of the Indian firm to meet certain "closing conditions."
The merger between ZEEL and SPNI was initially agreed upon on December 22, 2021. The Mumbai bench of NCLT had approved the scheme of the merger on August 10, 2023, which would have created a £7.6 billion media entity. However, Sony Corporation terminated the agreement on January 22, 2024, two years after the initial announcement.
Following the termination, both companies have pursued independent paths. ZEEL, facing financial challenges, is addressing them through various initiatives and has reported a net profit of £1.07 crore in the first quarter of this fiscal year.
(With inputs from PTI)
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