Zee Entertainment and Sony Settle Dispute Over Merger

Zee Entertainment Enterprises announced that it has entered into an agreement to settle all disputes with Sony Pictures Networks India (SPNI) regarding the termination of their merger.

Following the announcement, Zee’s share price surged by as much as 15% on August 27, reaching an intraday high of ₹154.9 before cooling off to ₹147.7, still up about 10% from the previous close.

Mutual Withdrawal of Claims by Zee Entertainment and SPNI:

“As part of the settlement, the companies (Zee and Sony Pictures Networks India) have mutually agreed to withdraw all respective claims against each other in the ongoing arbitration at the Singapore International Arbitration Centre, and all related legal proceedings initiated in the National Company Law Tribunal (NCLT) and other forums,” Zee Entertainment stated.

Background: Termination of the $10 Billion Merger Deal:

Earlier this year, SPNI terminated the proposed $10 billion merger deal with Zee Entertainment, effectively terminating the December 2021 agreement.

Sony sought a $90 million termination fee, citing alleged breaches by Zee of the merger agreement’s terms.

Zee’s Entertainment Counterclaim for Termination Fee:

In response, Zee Entertainment also sought a termination fee of $90 million (₹750 crore) from SPNI and its entity Bangla Entertainment Pvt. Ltd. (BEPL) in May.

The Company had stated in an exchange filing, “Culver Max and BEPL have failed to comply with their obligations under the Merger Cooperation Agreement (MCA). Therefore, the Company has terminated the MCA and called upon Culver Max and BEPL to pay the termination fee.”

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