 "The NCLT reverses approval of the Zee-Sony merger as parties agree to withdraw due to unresolved disputes. Dramatic fallout ensues.")
The National Company Law Tribunal (NCLT) recently approved the withdrawal of its order regarding the merger between Zee Entertainment and Sony Pictures Networks India. This decision follows an agreement between the two companies to resolve their six-month dispute over a failed USD 10 billion merger. The NCLT recalled its earlier approval from August 10, 2023, after Zee filed for withdrawal, stating that the merger scheme was no longer effective due to the termination of the related agreement. Both companies had previously sought termination fees of approximately USD 90 million from each other due to non-compliance with their merger agreement signed in December 2021.
The National Company Law Tribunal (NCLT) has taken a significant step by allowing Zee Entertainment and Sony Pictures Networks India to withdraw their merger agreement. This decision comes after the Mumbai bench of the NCLT recalled its previous order from August 10, 2023, which had initially approved the merger. The parties involved mutually agreed to withdraw the amalgamation scheme due to a settlement agreement, and the board of directors has formally resolved to pull back from the merger.
In their latest statement, the NCLT confirmed that it is permitting the withdrawal of the Scheme of Amalgamation, effectively reversing its earlier decision. Zee Entertainment filed for this withdrawal, stating that the Composite Scheme of the Merger Cooperation Agreement has been terminated; therefore, the merger has not moved forward nor achieved any effectiveness.
Prior to this decision, Zee and Sony had settled a six-month-long dispute regarding the failed USD 10 billion merger, agreeing to withdraw all claims against each other. Tensions arose when both companies sought a USD 90 million termination fee from one another over the non-fulfillment of the Merger Cooperation Agreement originally signed back in December 2021.
In January 2024, Sony withdrew from the proposed merger, citing Zee’s failure to meet certain conditions. This latest development marks the end of a lengthy and complex negotiation process between two media giants.
Zee and Sony had initially agreed to merge on December 22, 2021, but various disputes led to this withdrawal decision.
Tags: Zee Entertainment, Sony Pictures Networks, NCLT, merger agreement, media industry news, business updates.
-
What did the NCLT decide about the Zee-Sony merger?
The NCLT recalled its earlier order on the Zee-Sony merger, which means they have allowed changes to the plan. -
Can Zee and Sony still merge after this decision?
Yes, they can still merge, but they will have to rework the scheme to meet the NCLT’s new requirements. -
What does it mean to withdraw the scheme?
Withdrawing the scheme means that Zee and Sony can take back their current merger plan and make changes before submitting it again. -
Why did the NCLT recall the order?
The NCLT recalled the order to ensure that all legal requirements are properly met and to address any concerns raised about the merger. - What happens next for Zee and Sony?
They will revise their merger plan and resubmit it to the NCLT for approval before they can proceed with the merger.
