Zee moves NCLT, SIAC after Sony terminates $10 billion merger deal

Zee Entertainment on Wednesday, January 24, said it has approached the National Company Law Tribunal (NCLT) against Sony's decision to call off the proposed merger. Besides, it has also initiated legal action to contest Sony's claims of $90 million (around ₹748.5 crore) as a termination fee, for which the Japanese firm has moved the Singapore International Arbitration Centre (SIAC).

In a regulatory filing to the stock exchanges, Zee Entertainment Ltd said it has asked Culver Max and Bangla Entertainment Pvt Ltd (BEPL) to immediately withdraw the termination and confirm that they will perform their obligations to give effect to and implement the merger scheme, sanctioned by the NCLT.

Also Read: ZEE-Sony merger collapse: Mutual funds that have highest and lowest exposure to ZEE

The company has approached the Mumbai bench of NCLT, seeking directions to implement the merger scheme, it added. Further, the company has initiated appropriate legal action to contest Culver Max and BEPL’s claims in the arbitration proceedings before the SIAC, the filing said.

“The company has called upon Culver Max and BEPL to immediately withdraw the termination and confirm that they will perform their obligations to give effect to and implement the merger scheme,” added Zee in its exchange filing.

Announcing the termination of the merger deal two days ago, Sony said in a statement certain "closing conditions" to the merger were not satisfied despite "good faith discussions" with Zee, and the companies had been unable to agree upon an extension by their January 21 deadline.

"After more than two years of negotiations, we are extremely disappointed ... We remain committed to growing our presence in this vibrant and fast-growing market," Sony added.

As per the merger agreement, signed on December 22, 2021, Zee and Sony Pictures Networks India (now known as Culver Max), along with Bangla Entertainment Pvt Ltd, were to be merged into a single entity within 24 months.

Following the deal's termination by Sony, Zee's stock crashed at the markets. On January 23, it suffered the highest single-day fall of 30.50 per cent, and ended at ₹152.50. In the trading session on Wednesday, January 24, Zee's share price partially recovered, to settle at ₹166.35 apiece on the BSE.