The Mumbai bench of the National Company Law Tribunal (NCLT) approved the merger scheme between Zee Entertainment Enterprises Limited (ZEEL) and Culver Max Entertainment (Sony).
The bench in its oral order allowed the application for the merger.
Earlier on July 10, the division bench of judicial member HV Subba Rao and technical member Madhu Sinha reserved its order in the merger scheme between ZEEL and Sony, after hearing all the parties.
Various operational and financial creditors had objected to the Zee-Sony merger scheme in the NCLT. The company has reached a settlement with IDBI Bank, IndusInd Bank, and the Indian Performing Rights Society (IPRS).
“The NCLT’s order rightly rejects the misconceived objections to the scheme, which seems to have been filed solely to arm twist the merging entities. The order paves way for the merger, which is beneficial to all the stakeholders, including the shareholders and the creditors. Quite rightly, the order also upholds and safeguards the interests of all genuine stakeholders” said Anuj Tiwari, Partner at ASR & Associates who is advising Zee group on merger.
ZEEL MD and CEO Goenka had earlier told ET that the merger would proceed with or without him serving as CEO. According to the merger agreement, the CEO of ZEEL will serve as the combined company’s MD and CEO for a five-year period.
Recently, the Securities Appellate Tribunal (SAT) declined to overturn the interim order issued by the Securities and Exchange Board of India (SEBI) prohibiting ZEEL Chairman Emeritus Subhash Chandra Goenka and his son Punit Goenka from serving as directors or executives of publicly listed firms.
In December 2021, Sony and ZEEL signed definitive agreements to merge. Sony will indirectly hold a majority of 50.86% of the combined company; the founders of ZEEL will hold 3.99%; and the other ZEEL shareholders will hold a 45.15% stake.
Once ZEEL merges with SPNI, the merged entity will have a cash balance of $1.5 billion at closing, including through an infusion by the current shareholders of SPNI and the promoters (founders) of ZEEL.
The fund infusion will enable the combined company to drive sharper content creation across platforms, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fast-growing sports landscape, and pursue other growth opportunities.
On September 22, 2021, Sony signed an exclusive non-Binding Term Sheet With ZEEL. On December 21, 2021, Sony and ZEEL signed definitive agreements to merge. The BSE and NSE approved the merger scheme on July 29, 2022.
On October 5, 2022, the Competition Commission of India (CCI) gave conditional approval to the merger and asked ZEEL to sell three Hindi channels—Big Magic, Zee Action, and Zee Classic—to address possible anti-competition concerns arising out of their proposed mega-merger deal.
On October 14, ZEEL shareholders approved the proposed merger of ZEEL and Bangla Entertainment, an SPNI subsidiary, with and into Culver Max Entertainment.
