Zee and SPNI resolve merger disputes in amicable settlement

Zee Entertainment Enterprises (Zee) and Culver Max Entertainment (CMEPL), known as Sony Pictures Networks India (SPNI), along with its affiliate Bangla Entertainment (BEPL), have reached a comprehensive non-cash settlement, amicably resolving all disputes related to their planned merger. This resolution pertains to the Merger Cooperation Agreement and the Composite Scheme of Arrangement.

According to a joint statement from the companies, both parties have agreed to withdraw all claims against each other. This includes ending ongoing arbitration at the Singapore International Arbitration Centre and discontinuing related legal proceedings initiated in the National Company Law Tribunal (NCLT) and other forums.

Additionally, both Zee and SPNI will withdraw their respective Composite Schemes of Arrangement from the NCLT and inform the relevant regulatory authorities. The settlement terms ensure that neither Zee nor Sony will have any outstanding or ongoing obligations or liabilities towards one another.

This mutual agreement reflects a shared understanding to independently pursue future growth opportunities. It marks a definitive end to all disputes, enabling both companies to focus on evolving in the dynamic media and entertainment industry.

Further provisions of the settlement include both parties relinquishing the right to file claims or counterclaims related to the Transaction Documents, including issues of termination and implementation. The agreement also involves withdrawing claims associated with a $90 million termination fee, damages, litigation costs, and other expenses related to the disposition, hive-off, spin-off, winding-up, liquidation, or closure of business or assets.

Previously, in April, Zee announced its decision to withdraw the merger application it had filed with the NCLT, Mumbai bench, against SPNI. This development followed the NCLT Mumbai bench's approval on August 10, 2023, for Zee's proposed merger with BEPL and CMEPL, which are part of the Sony group. The merger was set to create a media entity valued at approximately $10 billion.

However, on January 2022, Sony decided to call off the merger. The primary reasons cited included Zee's inability to meet certain financial terms and the failure to present a strategy to rectify these issues.

Zee responded by accusing Sony of acting in bad faith when terminating the merger. If the merger had gone through, it would have created the largest entertainment network in India, boasting over 70 TV channels, two video streaming platforms (Zee5 and Sony Liv), and two film studios (Zed Studios and Sony Pictures Films India).

This settlement marks a pivotal moment in the relationship between the two broadcasters, allowing both companies to move forward without the burden of ongoing legal disputes and to focus on leveraging their respective strengths in the rapidly changing media landscape.