Priyanshu
In a significant development within the Indian media and entertainment sector, Zee Entertainment Enterprises Limited and Sony Pictures Networks India (operating under Culver Max Entertainment Private Limited) have reached a mutual settlement regarding their highly anticipated merger. This resolution marks the culmination of ongoing legal disputes at the Singapore International Arbitration Centre (SIAC) and the National Company Law Tribunal (NCLT).
The merger, initially announced on December 22, 2021, was projected to create a media behemoth with a combined valuation exceeding $10 billion. However, the deal encountered several legal and financial challenges that led to intense litigation. The primary contention revolved around the enforcement of the merger scheme, which faced opposition from several creditors, including Axis Finance and JC Flower Asset Reconstruction Co. Despite these hurdles, the NCLT Mumbai had approved the merger scheme in August 2023. Yet, the friction between the parties continued, leading to further legal action.
Sony Pictures had sought urgent relief from the SIAC to prevent Zee from pursuing remedies in other forums, including the NCLT. However, the SIAC rejected Sony’s plea, which escalated the legal battle further. Zee later moved to enforce the merger scheme through the NCLT, only to withdraw its application in April 2024.
The settlement agreement, reached on August 27, 2024, effectively terminates all transaction documents related to the merger, including the Merger Cooperation Agreement, non-compete agreements, and other related legal instruments. Both parties have agreed to withdraw all claims, counterclaims, and applications before the SIAC, including a contentious $90 million termination fee, and any litigation costs incurred. Moreover, they have relinquished any rights to future claims related to the merger.
This amicable settlement brings an end to a prolonged period of uncertainty for both entities. The decision to withdraw the composite schemes of arrangement from the NCLT and inform relevant regulatory authorities underscores the finality of the settlement. Notably, the companies have agreed that they have no outstanding obligations or liabilities towards each other, effectively closing this chapter in their corporate histories.
Case Title: Zee Entertainment Enterprises Limited vs. Sony Pictures Networks India