MUMBAI: Zee Entertainment Enterprises and Sony Pictures Networks India have agreed to settle their disputes regarding their aborted $10 billion merger deal including withdrawing all complaints and claims from Singapore and India courts. Under the settlement terms, both will have no outstanding obligations and liabilities to each other. In other words, both will drop their claim of a $90 million termination fee from each other for alleged breaches of the merger deal.
The announcement lifted Zee’s shares on the stock exchanges on Tuesday. Its stock ended at Rs 151 apiece, up 11% on the BSE. The development will allow Zee and the unlisted Sony India to pursue their individual growth plans in an evolving media and entertainment landscape.
In Jan this year, Sony, the local arm of Japanese giant Sony Corp, had called off its merger with Zee, citing unmet closing conditions and had moved the Singapore arbitration court seeking $90 million in break-up fee. Countering Sony’s accusations, Zee said it is the Japanese company that failed to comply with the merger agreement and asked it to pay the $90 million termination fee. Zee had spent Rs 400 crore on merger-related expenses. It moved India’s company law tribunal asking the court to direct Sony to implement the merger deal. However, three months later in April, Zee withdrew its merger implementation application from the Mumbai bench of the National Company Law Tribunal.
On Tuesday, Zee and Sony said they have entered into a settlement agreement to terminate all disputes regarding the cancelled merger deal. Accordingly, both will release each other from all claims. They will also make separate applications to the Singapore arbitration tribunal and the NCLT-Mumbai, withdrawing their petitions and relinquishing their rights against each other relating to the aborted deal.
The announcement lifted Zee’s shares on the stock exchanges on Tuesday. Its stock ended at Rs 151 apiece, up 11% on the BSE. The development will allow Zee and the unlisted Sony India to pursue their individual growth plans in an evolving media and entertainment landscape.
In Jan this year, Sony, the local arm of Japanese giant Sony Corp, had called off its merger with Zee, citing unmet closing conditions and had moved the Singapore arbitration court seeking $90 million in break-up fee. Countering Sony’s accusations, Zee said it is the Japanese company that failed to comply with the merger agreement and asked it to pay the $90 million termination fee. Zee had spent Rs 400 crore on merger-related expenses. It moved India’s company law tribunal asking the court to direct Sony to implement the merger deal. However, three months later in April, Zee withdrew its merger implementation application from the Mumbai bench of the National Company Law Tribunal.
On Tuesday, Zee and Sony said they have entered into a settlement agreement to terminate all disputes regarding the cancelled merger deal. Accordingly, both will release each other from all claims. They will also make separate applications to the Singapore arbitration tribunal and the NCLT-Mumbai, withdrawing their petitions and relinquishing their rights against each other relating to the aborted deal.