NCLT Approves Zee-Sony Merger, Clearing Path for $10B Media Giant

The National Company Law Tribunal (NCLT) granted its approval on Thursday for the merger between Zee Entertainment Enterprises Ltd and the Indian division of Sony, now known as Culver Max Entertainment, a significant deal that had been unveiled in 2021.

Effectively dismissing all objections, the NCLT's Mumbai bench, composed of HV Subba Rao and technical member Madhu Sinha, has paved the way for the establishment of a colossal $10-billion media conglomerate, set to become the largest of its kind in the country. The NCLT's division bench had previously reserved its judgment on the Zee-Sony merger on July 10, following the consideration of various objections raised by multiple creditors.

Zee Entertainment and Sony Pictures had come to an agreement in December 2021 to combine their respective businesses. The news of the NCLT's approval prompted a surge in Zee Entertainment's share price, which hit the 20 percent upper circuit, reaching Rs 290.50 on the BSE. Ultimately, the stock settled 17.95 percent higher at Rs 285.55.

Furthermore, the court expressed that the ongoing case at the Securities and Exchange Board of India (SEBI) should not hold the merger hostage. Earlier in June, Sebi had imposed a one-year ban on Subhash Chandra and Punit Goenka, preventing them from holding board positions in publicly listed companies. This decision was based on findings that indicated their active involvement in redirecting funds to other listed entities affiliated with the group and shareholders.

The NCLT's endorsement of the Zee-Sony merger is poised to usher in a significant transformation in the Indian media landscape, solidifying the creation of a major industry player with a remarkable $10-billion valuation.