Evaluating next steps, considering appropriate course of action: R Gopalan, ZEEL Chairman

As the mega-merger between Zee and Sony was called off on Monday, Zee Chairman R Gopalan said the company had taken all required steps over the last two years to ensure the merger and is now evaluating the next steps and appropriate course of action.

“The Board of Directors has taken note of Sony’s letters purporting to terminate the Merger Co-operation Agreement, on the Company’s proposed merger with and into Culver Max Entertainment Pvt. Ltd, invoking arbitration and seeking interim reliefs.

“We are evaluating the next steps and considering the appropriate course of action. The Board has noted that the Company took all the required steps in the course of its integration journey over the last two years, to ensure that the scheme is implemented at the earliest,” Gopalan said.

“The Board would like to assure its stakeholders that the Company will take all the necessary actions, in the best interest of all stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL’s claims in the arbitration proceedings.

“The Board has complete faith in the highly experienced senior management of the Company and will continue to guide the team. We recognize and value the trust our shareholders and stakeholders place in us, and we express gratitude for their continued support," he added.

“ZEEL has displayed utmost commitment towards the merger by undertaking several permanent and irreversible steps, resulting in one-time and recurring costs for ZEEL. Despite this, the Company will continue to evaluate organic and inorganic opportunities for growth, leveraging the intrinsic value of its assets. ZEEL remains eternally grateful to its esteemed shareholders for their continued trust and belief in all its decisions. ZEEL also expresses immense gratitude to the legal and regulatory authorities for their support in enabling the proposed merger and aims to continue working towards the overall growth of the sector and Indian economy at large,” the chairman said.

The journey of the merger began in December 2021 with ZEEL’s Board of Directors considering and approving the Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013 (Scheme). However, the merger process soon got into trouble after several ZEEL lenders raised objections.

The merger process was originally supposed to be completed by the end of September 2023, before the deadline was extended to December 22, 2023 due to legal complexities involving Zee.

On August 10, dismissing all objections raised by the lenders, the National Company Law Tribunal (NCLT) approved the merger.

If the merger had gone through, it would have owned over 70 TV channels, two video streaming platforms – ZEE5 and Sony LIV – and film studios – ZEE Studios and Sony Pictures Films India – with a market share of over 26%.

With this merger, ZEE and Sony would have had an audience of over 700 million people in its television and digital verticals, which would have enhanced their market presence and given them a bigger slice of the advertising pie.

(Compiled by Sonam Saini and Aditi Gupta)