Zee Entertainment Shares Surge 15% After Settling Merger Dispute with Sony; Check Details

According to the information provided to the exchanges, the companies will withdraw their respective Composite Schemes of Arrangement from the NCLT and notify the relevant regulatory authorities

Zee Entertainment Enterprises Ltd's share price surged by as much as 15 per cent on Tuesday following the company's announcement of a settlement agreement with Sony over the terminated merger. During afternoon trading, Zee's stock reached an intraday high of Rs 154.9 before settling at Rs 147.7. Despite the slight pullback, the stock remained approximately 10 per cent higher than its previous closing price.

According to the information provided to the exchanges, the companies will withdraw their respective Composite Schemes of Arrangement from the NCLT and notify the relevant regulatory authorities, thereby terminating the $10 billion deal.

Zee Entertainment said in a statement, "As part of the settlement, the companies (Zee and Sony Pictures 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.”

Additionally, the entertainment giants have agreed to forgo any rights to file claims or counterclaims against each other concerning the Transaction Documents, including issues related to their termination and execution.

The settlement also includes the withdrawal of all claims for the $90 million termination fee, as well as any damages, litigation costs, and other expenses. This includes claims related to disposition costs, spin-offs, winding-up, liquidation, business closure, and any other associated assets.

Earlier this year, Sony Pictures India ended its proposed $10 billion merger with Zee Entertainment in January, nullifying the agreement made in December 2021. Sony also demanded a termination fee of $90 million, citing alleged breaches of the merger terms by Zee Entertainment.

If the Sony-Zee merger had proceeded, it would have created the nation's largest entertainment network, encompassing over 70 TV channels, two video streaming platforms (ZEE5 and Sony LIV), and two movie studios (Zed Studios and Sony Pictures Films India).