The National Company Law Tribunal (NCLT) has reversed its previous approval of the merger between Zee Entertainment and Sony Pictures Networks India, recalling its earlier order from August 10, 2023.
The Mumbai bench of the NCLT decided to withdraw the merger order after both parties mutually agreed to terminate the scheme, as outlined in their settlement agreement. The board of directors from both companies have also passed resolutions to withdraw the scheme of amalgamation.
In its order, the NCLT stated, “Accordingly, this Bench allows the withdrawal of the Scheme of Amalgamation and hereby recalls the order dated 10.08.2023 in C.P.(CAA) No. 209 of 2022,” as reported by Zee on Thursday.
Zee requested the withdrawal, noting that the Composite Scheme of the Merger Cooperation Agreement, which was intended to effectuate the merger, has been terminated. Consequently, the closing date has not been met, and the scheme has not been enacted.
On August 27, Zee Entertainment and Sony Pictures Networks India resolved their six-month dispute regarding the failed USD 10-billion merger and agreed to drop all claims against each other. Both companies have mutually decided to withdraw their respective claims from ongoing arbitration at the Singapore International Arbitration Centre (SIAC) and other legal proceedings initiated at the NCLT and other forums.
Previously, both Zee and Sony sought a termination fee of USD 90 million (approximately Rs 748.7 crore) from each other due to non-compliance with the Merger Cooperation Agreement (MCA) signed in December 2021. In January of this year, Sony had exited the proposed USD 10.5-billion merger, citing Zee’s failure to meet certain “closing conditions.”
The agreement to merge between Zee and Sony was originally made on December 22, 2021.