Zee amicably settles dispute with Sony over merger deal fallout, shares jump over 14%

As part of the settlement, Zee and Sony, along with the latter's group company Bangla Entertainment Pvt Ltd (BEPL), will be withdrawing all cases against each other.

The parties involved "have arrived at a comprehensive non-cash settlement, amicably resolving all disputes related to the Merger Co-operation Agreement and the Composite Scheme of Arrangement", Zee said in a media release.

Following the announcement, the shares of Zee soared on the bourses. The scrip touched a high of ₹154.9 apiece on the National Stock Exchange (NSE), up 14.5% as against the last closing price.

Notably, Zee and Sony, which operates in India as Culver Max Entertainment Pvt Ltd, had in December 2021 inked a pact aimed at forming a $10-billion merged entity. As per the terms of the pact, the amalgamation was to be brought into effect by December 2023.

The deal, however, was called off in January this year as Sony blamed Zee for not meeting the conditions for closing the merger deal. Both sides, according to reports, could not reach consensus on leadership of the proposed merged entity.

Subsequently, Sony had moved the Singapore International Arbitration Centre, seeking $90 million from Zee as termination fee for allegedly failing to meet the requirements laid under the merger agreement.

Zee, on the other hand, demanded $90 million from Sony for calling off the proposed amalgamation. The India-headquartered media firm claimed that it incurred merger related costs to the tune of ₹432 crore during 2023-24 and 2022-23.

All cases to be withdrawn

"As part of the settlement, the companies 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 said.

"Under the terms of the settlement, none of the parties will have any outstanding or continuing obligations or liabilities to the other," the release added.

The settlement stems from a mutual understanding between the companies to independently pursue future growth opportunities, it further noted.