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Sony formally take back Zee merger application from NCLT

Sony Pictures Networks India (SPNI) recently decided to withdraw its merger application with the National Company Law Tribunal (NCLT) regarding its proposed business combination with Zee Entertainment Enterprises Ltd (ZEEL). This move came after Sony terminated its merger discussions with Zee on January 22, a process that had been ongoing for two years and aimed to establish a media giant valued at approximately $10 billion.

The merger’s termination was also followed by the end of the agreement between Sony entities Culver Max and Bangla Entertainment with Zee, citing unmet conditions. These entities have additionally requested a termination fee of $90 million from Zee.

Despite attempts to contact Sony Pictures Networks India for comments, there was no immediate response.

In response to Sony’s termination of the merger deal, ZEEL announced on January 24 that it had approached both the NCLT and the Singapore International Arbitration Centre (SIAC) against SPNI’s actions. ZEEL sought directions from the NCLT’s Mumbai bench to proceed with the merger scheme. Meanwhile, Sony Group companies had sought an injunction from SIAC to bar ZEEL from seeking legal recourse from the NCLT or any other Indian or international courts pending the arbitration process. However, SIAC’s emergency arbitrator ruled that it lacked the jurisdiction to prevent Zee from filing with the NCLT.

Following the collapse of the merger talks, ZEEL’s stock prices have fallen nearly 30 percent. In an effort to address the situation, ZEEL disclosed last week that its board had approved the formation of an independent advisory committee. This committee is tasked with reviewing and addressing the spread of misinformation, market rumors, and speculation that have negatively impacted public perception of the company and led to a significant loss of investor wealth.