Zee Entertainment Enterprises Ltd.’s shares rallied after it announced the settlement of its legal dispute with Sony Pictures Networks India, finally pulling the curtains down on a corporate battle over a failed merger that would have created a media giant.
Zee’s shares surged 15 per cent on Tuesday after the Mumbai-based broadcaster issued a joint statement on a “comprehensive non-cash settlement, amicably resolving all disputes” related to their aborted merger with Sony Group Corp.’s India unit.
The terms of settlement weren’t disclosed.
In January, Sony and Zee officially called off their plans to merge after two years of drama and delays in their efforts to forge an entertainment heavyweight in one of Asia’s biggest streaming markets. Both sought break-up fees from each other, with each side claiming the other had failed to comply with their obligations as per the merger pact. The legal wrangle eventually ended up in an arbitration court in Singapore.
“The companies have mutually agreed to withdraw all respective claims against each other, in the ongoing arbitration at the Singapore International Arbitration Centre” and across the India company courts, Zee and Sony said in the statement. “The settlement stems from a mutual understanding between the companies to independently pursue future growth opportunities.”
The settlement removes a legal overhang for Zee as it looks to bolster profitability in a sector where its rivals are already bulking up. Walt Disney Co. signed a binding agreement in late February to combine its India unit with Viacom 18 Media Pvt., a part of billionaire Mukesh Ambani’s media empire, to create an $8.5 billion entertainment firm with a giant share in cricket broadcasting rights.
