Zee and Sony Reach Settlement, Ending Merger Disputes

New Delhi: Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India (SPNI) have amicably settled their six-month-long dispute related to the failed $10-billion merger. The agreement brings an end to legal proceedings that were ongoing at the Singapore International Arbitration Centre and the National Company Law Tribunal (NCLT) in India.

Key Points:

1. Withdrawal of Claims: Both companies have agreed to withdraw all claims against each other. This includes claims for the $90 million termination fee, damages, litigation costs, and other expenses.
2. Composite Scheme of Arrangement: The settlement also terminates the Composite Scheme of Arrangement that had been filed with regulatory authorities. As part of the non-cash settlement, neither party will have any outstanding obligations or liabilities to the other.
3. Background on the Merger: The proposed $10 billion merger between Zee and Sony was halted earlier this year after more than two years of negotiations and regulatory scrutiny. Legal disputes followed, leading to the recent settlement.
4. Sony’s Decision to Call Off the Merger: Sony’s decision to call off the merger was influenced by Zee’s inability to meet certain financial terms of the agreement and devise a strategy to rectify them. Zee, in turn, accused Sony of acting in “bad faith” when canceling the merger.
5. Missed Opportunity: The merger could have resulted in the creation of a media company valued at USD 10 billion, owning over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two movie studios (Zed Studios and Sony Pictures Films India).

Industry Landscape:

• Zee: A prominent player in the Indian media space, Zee boasts a global reach of over 1.3 billion people across 190 countries.
• Sony: SPNI manages a portfolio of popular channels, including Sony Entertainment Television, Sony MAX, and Sony SAB.

While this settlement marks the definitive conclusion of all disputes between Zee and Sony, the Indian streaming and TV landscape continues to evolve. A potential merger between the Indian media businesses of Reliance and Disney, valued at $8.5 billion, is still on the cards but may face anti-trust scrutiny over cricket rights.