NCLT Serves Notice on Zee’s Suit Seeking Execution of the Sony Merger

The National Company Law Tribunal (NCLT) will hear Zee Entertainment’s petition to effectuate a merger with Sony Pictures’ India business on March 12. Zee’s stock price rose when the NCLT posted the petition.

 The merger proposal, which would have formed a $10 billion media corporation, was authorized by the NCLT’s Mumbai bench in August 2023. However, Sony terminated the deal in January due to delays and a lack of consensus on the amalgamated entity’s leadership. 

Zee has also sought the Singapore International Arbitration Centre (SIAC) to implement the merger agreement.

The National Company Law Tribunal has issued a notice about Zee Entertainment’s request to effectuate a merger with Sony Pictures‘ India unit.

Reuters stated that the panel will hear the matter on March 12. Following the NCLT’s listing of the plea, Zee’s share price rose 1.4% from the day’s low.

In August 2023, the NCLT’s Mumbai bench authorized the merger, which would have resulted in a $10 billion media behemoth. However, Sony terminated the arrangement in January due to a series of delays. Insiders told ET that a lack of agreement on who would run the merged firm was one of the reasons the merger did not go through.

Following Sony Pictures’ abandonment of a deal that would have formed India’s largest broadcasting corporation, Zee said that it will pursue implementation of the merger agreement through NCLT and the Singapore International Arbitration Centre (SIAC).

The SIAC recently dismissed a petition filed by Culver Max Entertainment (previously known as Sony Pictures Network India) and BEPL (Bangla Entertainment Pvt Ltd) to prevent Zee from pursuing the merger through the NCLT or any other corporate conflict body. However, SIAC dismissed the plea, alleging a lack of jurisdiction.

Sony Pictures, located in Japan, said on Monday that it is confident in the situation. “We are dissatisfied with the ruling of the Singapore International Arbitration Centre (SIAC). This judgment is just a procedural one, determining whether Zee Entertainment is authorized to pursue its application with the NCLT,” it stated.

Sony terminated the merger deal, alleging that Zee did not meet the merger criteria, and demanded a termination fee of Rs 748.5 crore, or $90 million.

Sony Group and Zee Entertainment Enterprises terminated their merger agreement owing to a disagreement over the managing director and chief executive positions. Sony’s termination letter cited various violations by Zee, including a reduction in operational profit, non-disclosure of investigations, and striking a contract with Disney Star without Sony’s authorization. Zee defended its conduct, claiming that there were sports-related exclusions and questioning Sony’s reasons for bringing up complaints late.