Sony withdraws $10-billion merger agreement with Zee from NCLT

Sony Pictures Networks India has reportedly withdrawn its application filed with the National Company Law Tribunal  concerning the merger of its India operations with Zee Entertainment Enterprises Ltd.

With the withdrawal of the application, this could be the final step in ending the two-year-old merger talks that were aimed at creating a $10 billion media giant, according to reports.

Sony officially withdrew itself from the deal talks in January this year. On January 22, Sony entities Culver Max and Bangla Entertainment also decided to end their merger agreement with Zee and cited “unfulfilled conditions” as the reason behind the move. Further, Sony sought a $90 million termination fee from ZEEL.

Following Sony’s move, Zee moved NCLT and the Singapore International Arbitration Centre (SIAC) against the former’s decision to terminate the merger deal.

On January 24, Zee said it moved the NCLT and the Singapore International Arbitration Centre (SIAC) against Sony Pictures Network India’s (SPNI) decision to terminate the merger talks.

Zee also said that it has sought directions from the Mumbai-bench of NCLT to implement the merger scheme.

On the other hand, Sony Group companies requested SIAC to stop Zee from seeking legal remedies until arbitration proceedings are underway.

Sony Group of companies did not get any interim relief from the SIAC’s emergency arbitrator. The arbitrator said that it had no jurisdiction to prevent Zee from approaching the NCLT.

Post merger termination, ZEEL shares have taken a massive hit, falling over 30%.

Meanwhile, the board of ZEEL approved setting up an independent advisory committee in a bid to curb misinformation, rumours and negative public opinion in the markets about the merger talks.

As earlier reports indicated, the Sony-Zee merger initiative, which began in 2021, was expected to conclude by December 21, 2023. However, the merger deal faced numerous delays due to obstacles, including legal actions from regulators and creditors against Zee.

The termination of the merger has various aspects to it. One of the key reasons was the alleged money laundering case against key promoters of Zee.

Shares of Zee Entertainment Enterprises Ltd were trading 0.61% lower at ₹161 apiece on NSE at 3:16 pm. Upstox