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What Is a Case Study?

When you’re performing research as part of your job or for a school assignment, you’ll probably come across case studies that help you to learn more about the topic at hand. But what is a case study and why are they helpful? Read on to learn all about case studies.

Deep Dive into a Topic

At face value, a case study is a deep dive into a topic. Case studies can be found in many fields, particularly across the social sciences and medicine. When you conduct a case study, you create a body of research based on an inquiry and related data from analysis of a group, individual or controlled research environment.

As a researcher, you can benefit from the analysis of case studies similar to inquiries you’re currently studying. Researchers often rely on case studies to answer questions that basic information and standard diagnostics cannot address.

Study a Pattern

One of the main objectives of a case study is to find a pattern that answers whatever the initial inquiry seeks to find. This might be a question about why college students are prone to certain eating habits or what mental health problems afflict house fire survivors. The researcher then collects data, either through observation or data research, and starts connecting the dots to find underlying behaviors or impacts of the sample group’s behavior.

Gather Evidence

During the study period, the researcher gathers evidence to back the observed patterns and future claims that’ll be derived from the data. Since case studies are usually presented in the professional environment, it’s not enough to simply have a theory and observational notes to back up a claim. Instead, the researcher must provide evidence to support the body of study and the resulting conclusions.

Present Findings

As the study progresses, the researcher develops a solid case to present to peers or a governing body. Case study presentation is important because it legitimizes the body of research and opens the findings to a broader analysis that may end up drawing a conclusion that’s more true to the data than what one or two researchers might establish. The presentation might be formal or casual, depending on the case study itself.

Draw Conclusions

Once the body of research is established, it’s time to draw conclusions from the case study. As with all social sciences studies, conclusions from one researcher shouldn’t necessarily be taken as gospel, but they’re helpful for advancing the body of knowledge in a given field. For that purpose, they’re an invaluable way of gathering new material and presenting ideas that others in the field can learn from and expand upon.


sony and zee merger case study

sony and zee merger case study

India: Zee- Sony Merger- A Journey Through Challenges And Triumphs

sony and zee merger case study


In the ever-evolving landscape of the media and entertainment industry, mergers and acquisitions are no strangers to controversy and complexity. The merger between Zee Entertainment Enterprises Limited (ZEE) and Sony Group Corporation (SGC) is a recent case study that highlights the intricate dance between regulatory scrutiny, stakeholder interests, and market dynamics. This article traces the trajectory of the Zee-Sony merger, from its inception to the eventual challenge in the National Company Law Tribunal (NCLT) and the favorable order that paved the way for its realization.

A Landmark Merger

The proposed merger between ZEE and SGC garnered significant attention due to its potential to reshape India's broadcasting sector. With a vision to create the largest television broadcaster in India, the merger promised a synergy of content production, distribution, and broadcasting capabilities. The Competition Commission of India (CCI), responsible for ensuring fair competition, raised initial concerns over market concentration in certain segments. The parties' proactive response to these concerns was pivotal in obtaining a phase one clearance from the CCI vide order dated October 4, 2022 1 .

The CCI's main areas of concern revolved around the parties' dominant presence in TV channel supply and advertising airtime markets. The fear of reduced bargaining power for advertisers and downstream partners like distribution platform operators (DPOs) triggered alarms. To address these concerns, the parties devised voluntary remedies, including the divestment of select TV channels. The parties' concerted efforts to demonstrate that their merger would not hinder fair competition played a crucial role in gaining CCI's approval.

The NCLT Challenge

Despite the CCI's green light, the journey towards the merger's completion encountered a significant obstacle in the form of creditors' objections. Creditors such as Axis Finance, JC Flower Asset Reconstruction, IDBI Bank, and others raised concerns about ZEE's alleged default on loans and misuse of funds. The creditors' objections were twofold:

  • Non-Compete Fee : One of the key objections pertained to the non-compete fee associated with the merger, a complex arrangement that sparked heated debates during the National Company Law Tribunal (NCLT) proceedings. The objection revolved around a non-compete fee of USD equivalent to INR 1,101,30,91,800 (Indian Rupees Eleven Hundred and One Crore Thirty Lakh Ninety-One Thousand and Eight Hundred). This fee was stipulated to be payable by SPE Mauritius Investment Limited, a Sony group entity, to Essel Mauritius. The funds from this non-compete fee were intended to be used either for Essel Mauritius to subscribe to its portion of the Essel Subscription Shares or paid to Essel Mauritius SPV for the same purpose. This intricate arrangement was part of the broader non-compete agreement involving key individuals and entities. The contention put forth by the objecting creditors was that this non-compete arrangement was, in fact, a cleverly disguised mechanism to disadvantage lenders and public shareholders of Zee Entertainment Enterprises Limited (ZEE). The argument was that if the non-compete fee wasn't allocated to the promoters, the substantial amount of INR 1,101,30,91,800 would have rightfully belonged to ZEE's shareholders. This, they argued, could have been utilized to recover the outstanding dues owed to the creditors. The essence of the objection lay in the alleged dubious nature of the non-compete fee arrangement. Creditors questioned the legitimacy and fairness of this arrangement, suggesting that it was structured in a way that potentially diverted significant funds from the company and its shareholders to the promoters' benefit. These objections were lodged on the grounds that the merger would negatively impact their interests. The NCLT was tasked with weighing these objections against the potential benefits of the merger.
  • Appointment : This challenge revolved around the appointment of Mr. Punit Goenka as Managing Director and CEO for a five-year term following the scheme's implementation. The intricacies of this appointment, alongside recent developments involving regulatory authorities, added layers of complexity to the NCLT's deliberations. The appointed Managing Director and CEO position was envisioned to be held by Mr. Punit Goenka, a key figure in the Zee Entertainment Enterprises Limited (ZEEL) landscape. However, this proposition faced strong opposition from creditors who pointed to a recent interim order issued by the Securities and Exchange Board of India (SEBI). This order, issued on June 12, 2023 2 , restrained both Mr. Punit Goenka and Mr. Subhash Chandra from assuming any key managerial positions in listed companies or their subsidiaries. The order was rooted in allegations of financial irregularities purportedly committed through entities within the Essel Group. The crux of the creditors' argument rested on the premise that the appointment of Mr. Punit Goenka as CEO of the merged Zee-Sony entity should not proceed due to the ongoing regulatory scrutiny. The SEBI order, they asserted, cast a shadow of uncertainty over the eligibility of Mr. Punit Goenka to hold such a position within a listed company. The petitioners further emphasized that both Mr. Subhash Chandra and Mr. Punit Goenka had appealed the SEBI order but were denied a stay by the Securities Appellate Tribunal, underscoring the urgency and sensitivity of the matter.

NCLT's Findings and Observations

In a process laden with legal intricacies, stakeholder interests, and regulatory obligations, the NCLT's findings and observations illuminated the legal landscape surrounding the Sony-Zee merger and the balance between corporate ambitions and regulatory compliance. The NCLT's detailed findings and observations are as follows:

Stakeholder Claims and Privity of Contract -The NCLT's analysis commenced by scrutinizing the objectors who raised concerns against the merger. It was highlighted that none of the objectors were direct creditors of Zee Entertainment Enterprises Limited (ZEE) nor had any privity of contract with ZEE. Instead, the claims of these objectors stemmed from their dealings with other entities within the Essel Group. This distinction was paramount in understanding the legal standing of the objectors in the context of the Sony-Zee merger.

Legal Disputes and Disputed Claims - The NCLT's observations extended to the nature of the claims themselves. Among the objectors, JC Flower's claim, arising from being the assignee of Yes Bank, was built upon a letter of comfort given by Dr. Subhash Chandra. The tribunal questioned the rationale behind lending a substantial amount based on a mere letter of comfort, which was distinct from a guarantee under legal norms. Moreover, the NCLT noted that certain claims were in dispute and pending before various courts and tribunals, further complicating the objectors' standing.

Statutory Requirements and Objection Criteria - The NCLT's analysis extended to the statutory framework governing objections to schemes of arrangement under Section 230 3 of the Companies Act, 2013 and law laid down in the cases of Emco Ltd. 4 , Astorn Research Ltd. 5 and Mayfair Ltd. 6 which stipulates that to object to a scheme, the objector must be a creditor, and their claim should not be disputed. The tribunal found that none of the objectors satisfied these requirements.

Commercial Wisdom and Shareholder Approval - The NCLT also acknowledged the principle of commercial wisdom exercised by shareholders in approving a scheme of arrangement as per the law laid down by the Hon'ble Supreme Court in Miheer Mafatlal V. Mafatlal Industries 7 . The fact that 99.997% of ZEE's shareholders approved the scheme was a significant factor in the NCLT's analysis. The tribunal highlighted that it has limited jurisdiction to interfere with the shareholders' commercial wisdom unless the scheme is deemed unconscionable, illegal, unfair, or unjust.

Separate Legal Entities and Asset Transfer - The NCLT's observations recognized the distinct legal status of each entity within the Essel Group. It was emphasized that ZEE's assets and liabilities would merge with the new entity, ensuring the lenders' rights to recovery were not compromised. The scheme's provisions facilitated the transfer of debts, borrowings, and liabilities to the merged entity, underscoring the continuity of rights and obligations.

The NCLT's findings in the Sony-Zee merger deal underscore the significance of legal precision, regulatory compliance, and the principles of corporate governance in complex business transactions. As the merger journey advances, the NCLT's role in assessing objections demonstrates the importance of a fair and transparent legal process in shaping the landscape of corporate consolidation and transformation.

The NCLT's deliberations culminated in a verdict that held immense implications for both ZEE and SGC. The tribunal acknowledged the creditors' objections but ultimately dismissed them, ruling in favour of the merger vide order dated August 10, 2023 8 .

Conclusion: Lessons from the Zee-Sony Merger

The journey of the Zee-Sony merger is a testament to the complexity of mergers in the media and entertainment sector. It underscores the importance of proactive engagement with regulatory bodies and the need to address concerns through voluntary remedies. The NCLT's final approval exemplifies the delicate balance between stakeholder interests and market competition which was grounded in the belief that the merger would serve the best interests of ZEE's stakeholders, creditors, and employees. This decision was a pivotal moment, as it signalled the alignment of legal considerations with the merger's strategic promise.

As the media landscape continues to evolve, the Zee-Sony merger serves as a valuable case study for future mergers and acquisitions in the sector – a reminder that strategic vision, regulatory compliance, and stakeholder alignment are key to overcoming challenges and achieving success.

Shantam Sharma, Assessment Intern at S.S. Rana has assisted in the research of this Article.

1. Available at:

2. Available at:,comfort%20to%20Yes%20Bank%20Ltd .

3. Section 230. Power to compromise or make arrangements with creditors and members

4. (2004) SCC Online Bom 422

5. (2013) SCC OnLine Guj 1510

6. (2003 94) Mh.L.J.663

7. (1997) 1 SCC 579

8. Available at:

For further information please contact at S.S Rana & Co. email: [email protected] or call at (+91- 11 4012 3000). Our website can be accessed at

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

sony and zee merger case study

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sony and zee merger case study


Exploring the Sony-Zee Merger: A Comprehensive Analysis

[By Jose S Jose ]

The author is a student of The National University of Advanced Legal Studies (NUALS), Kochi.


In a significant stride within the entertainment industry, NCLT (National Company Law Tribunal) Mumbai recently granted approval for the merger of Zee Entertainment Enterprises and Culver Max Entertainment, previously known as Sony Pictures Networks India. This transformative green light not only ushers in the possibility of a formidable entertainment giant commanding about 26% of India’s entertainment market but also beckons the amalgamation of rich content portfolios and industry expertise.

However, beneath this promising surface, a series of legal challenges have cast shadows over the merger’s realization, resulting in protracted delays. In this comprehensive analysis, we’ll first explore the intricacies of the Corporate Insolvency Resolution Process (CIRP) proceedings against Zee by NCLT Delhi and the subsequent SEBI (Securities and Exchange Board of India) ban on Punit Goenka, Managing Director of Zee, which have collectively contributed to this prolonged period of uncertainty.

Beyond legal matters, we’ll discuss the background of the merger, the strategic agreement between Sony and Zee, and the potential benefits for shareholders and consumers. We’ll also navigate the legal hurdles and strategic intricacies of the Sony-Zee Entertainment merger, ultimately shedding light on the promising future it holds for India’s entertainment landscape.

While industry analysts speculate that the merger could potentially materialize within the next 2 to 3 months, the  timeline remains subject to various factors, introducing an element of uncertainty. In the dynamic landscape of mergers and acquisitions, anticipation is met with caution. The seeds of this partnership were sown back in 2021 when both entertainment juggernauts, Sony and Zee, forged an agreement to pool their expertise, digital assets, and extensive networks. With this ambitious alignment, a new chapter in the entertainment industry seems inevitable.

Under the terms of this strategic agreement , the Sony group stands poised to claim a controlling stake of approximately 51% in the nascent entity. Meanwhile, the founders of Zee are set to retain a notable 4% share. The remaining equity will be thoughtfully allocated among the existing shareholders of Zee, allowing for a diversified ownership structure reflective of the company’s roots.

This merger is a juncture of strategic relevance, offering manifold advantages for the new conglomerate. By synergizing their strengths, these companies aim to fortify their competitive edge in the market. Beyond boardrooms, shareholders too are poised to reap the rewards, as the merger is anticipated to translate into an augmented value of shares. At the same time, consumers are expected to be the ultimate beneficiaries, as the amalgamation promises an enhanced content palette, catering to an ever-evolving appetite for diverse entertainment experiences. This significant milestone is currently hindered by the legal obstacles that have raised significant concerns.


Corporate insolvency resolution process (cirp).

A significant turning point emerged when IndusInd Bank set in motion the process for Corporate Insolvency Resolution Proceedings (CIRP) against Zee Entertainment. The initial salvo was fired with an application filed at the NCLT Mumbai, invoking Section 7 of the Insolvency and Bankruptcy Code (IBC) , complemented by Rule 4 of the Insolvency & Bankruptcy (Application to Adjudication Authority) Rules, 2016 . Section 7 of the IBC confers the authority upon financial creditors to initiate the corporate insolvency resolution process against a corporate debtor before the NCLT. Meanwhile, Rule 4 of the Application to Adjudication Authority Rules outlines the procedural compass for filing such an application.

In this legal overture, IndusInd Bank set its sights on resolving a financial debt that scaled beyond 90 crores—a threshold that bore implications for both Zee Entertainment and the proposed merger. The filing of this application injected a notable pause into the rhythm of the merger’s progression, casting a shadow of uncertainty over its timeline.

The unfolding narrative took a series of twists as the legal pendulum swung back and forth. The order initiating the insolvency process issued by the NCLT Mumbai , which carried the resonance of a significant pronouncement, encountered an intermission when it was effectively stayed by an order from the NCLAT Delhi. However, the tide shifted once more as the same judicial forum, the NCLAT Delhi, ultimately terminated the CIRP order. The restoration of movement was prompted by a pivotal development—namely, the emergence of a settlement between the two principal entities involved: Zee Entertainment and IndusInd Bank. Remarkably, the settlement between the two has streamlined the process of merger.


Empowered by the SEBI Act of 1992 , the Securities and Exchange Board of India (SEBI) stands as a consequential statutory body entrusted with safeguarding investor interests and fostering the growth of India’s securities market. In a sweeping move, SEBI wielded its regulatory authority to impose bans on two significant figures within the Essel Group—the Chairman, Subhash Chandra, and Zee’s CEO, Punit Goenka. This decisive action was catalyzed by compelling evidence that illuminated a troubling pattern: both individuals had allegedly misappropriated funds through a misuse of their directorial positions.

The reverberations of SEBI’s stance echoed beyond its initial pronouncement. This interim ban, effectuated with resolute intent, was upheld by the Securities Appellate Tribunal (SAT). This affirmation cemented the gravity of the allegations and the necessity of the actions undertaken.

The consequences rippled across the corporate landscape, throwing into question the identity of the future director of the envisaged merged entity—a role previously slated for Zee’s incumbent CEO, Punit Goenka. This unforeseen hurdle cast a shadow over the merger’s strategic blueprint, inducing fluctuations in market sentiment. The tangible ramifications extended to Zee’s stock price, experiencing a noteworthy reduction. Mandated by SEBI, a probe has been set in motion with the express aim of unravelling the intricate threads that have woven this complex narrative. The investigation’s scope, ambitiously encompassing an 8-month timeline, serves as a testament to the gravity of the situation and the meticulous inquiry required.


While the ink on the merger agreement between these two entities was penned and announced back in 2021, the long-awaited union remains in a state of suspended animation due to the legal hurdles delineated earlier. Yet, with the recent development of the CIRP proceedings being set aside by the NCLAT and the NCLT’s resounding approval of the merger, a promising chapter seems to unfold for both these corporate entities.

As the turbulence of legal impediments begins to subside, the horizon appears notably clearer for these companies. A sense of optimism envelopes the situation, amplified by the fact that the merger’s finalization inches closer. If all unfolds as anticipated, this corporate marriage is poised to reach its culmination by the close of the current fiscal year—namely, by the end of March 31st, 2024 . This impending landmark is in no small part attributed to the pivotal NCLT ruling, which has paved an unequivocal path forward for this transformative fusion.

An application for the merger was formally lodged under the aegis of Sections 230-232 of the Companies Act 2013 . These crucial provisions are dedicated to facilitating the judicial sanctioning of compromises or arrangements tied to mergers, amalgamations, or divisions—a process overseen by the tribunal. The tribunal, in this context, wields the authority to summon a stakeholders’ meeting and extend invitations for objections.

This merger encountered a variety of objections from a range of creditors, including prominent entities such as Axis Finance Ltd. and IDBI Trusteeship Services Ltd. . Among these stakeholders, a palpable concern emerged—a concern that echoed in various quarters. The statute stipulated that an objector must assert a stake holding that accounts for 10% or more of the company’s shares or, in the case of creditors, must be owed 5% or more of the total outstanding debt. In the specific context at hand, this criterion wasn’t met.

Notably, the tribunal discerned a particular facet—the objecting creditors, while substantial in number, did not directly extend credit to Zee. Instead, their financial claims were woven into the intricate tapestry of the Essel Group’s various entities, of which Zee is just a pivotal part.

With these insights in mind, the tribunal, with its impartial gavel, dismissed all objections, upholding the rationale that the objectors did not fulfill the statutory qualifications necessary to warrant their objections. Consequently, the green light was bestowed upon the merger , cementing the tribunal’s approval as a vital step in the unfolding narrative.

It is worth noting that the resolute calculations of the NCLT indicated that the resultant entity, post-merger, would command an estimated valuation of around 44,000 crores. In the unfolding narrative of the Sony-Zee merger, ambition and legal intricacies have woven a captivating tale. The green light from NCLT Mumbai signaled the potential of a transformative entertainment colossus. Despite the challenges posed by CIRP proceedings and SEBI’s interventions, the resolve of both entities has endured, paving the way for a brighter chapter. This experience highlights the need for companies to maintain a careful equilibrium between expansion and adherence to regulatory requirements. . As the curtain rises on the merger’s realization, the fusion of creativity, expertise, and corporate responsibility offers a promising landscape. The narrative exemplifies the industry’s resilience in surmounting hurdles, promising an era of innovation and shared success in the dynamic landscape of Indian entertainment.

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ZEE-Sony Merger | Why did Zee Entertainment decide to merge with Sony?

Ria Puneyani

On September 22, the board of Zee Entertainment Enterprises (ZEEL) accepted a non-binding term sheet with Sony Pictures Networks India to consolidate their businesses, with Sony's promoters investing Rs 11,615 crore ($1.57 billion) in the merged entity as growth capital, making it India's most extensive entertainment network with approximately $2 billion in revenues and a 26% viewership share. The statement resulted in a 9.99 per cent increase in Zee stock.

Following the infusion of growth money, ZEEL shareholders own around 47 per cent of the combined company, while Sony India promoters own 53 per cent.

Zee-Sony Merger - Division of the Shares and Profits Previous ZEEL Deals Zee-Sony Merger - Challenges Companies may confront Zee-Sony Merger - How is it Beneficial for Both Companies? Conclusion FAQs

Zee-Sony Merger - Division of the Shares and Profits

Punit Goenka - CEO of ZEE

Based on the current anticipated equity values of ZEEL and Sony India, the stated merger ratio would have been 61.25 per cent in favour of ZEEL.

In exchange for current ZEEL backers and their affiliates pledging not to compete with the combined firm, Sony India's promoters agreed to transfer roughly a 2% interest in the merged entity. The Subhash Chandra family would own 4% of the amalgamated business, which established India's first private sector entertainment network, with the opportunity to grow their holding to 20%. The family liquidated their ZEEL shareholding to repay Rs 13,000 crore in loans from Indian banks for failed diversifications such as infrastructure projects.

While Sony's promoters will have the right to appoint the majority of the board's directors, Punit Goenka, ZEEL's CEO and MD will lead the amalgamated firm.

The nomination compensation committee, the board of directors, and the shareholders of the combined firm must all approve Goenka's appointment.

sony and zee merger case study

Previous ZEEL Deals

Sony Pictures N is attempting a deal with ZEE for the second time. SPN was one of the few shortlisted strategic investors with whom ZEE was negotiating to sell the promoters' shareholding and infuse funds for development.

ZEE could not reach an agreement with a strategic investor in 2019 and was obliged to settle for a financial one due to a liquidity shortage. Even though most of the promoters' debt had been paid off, the firm still needs development capital.

During the lockdown, ZEE was considering various funding possibilities, including loans, as it is a debt-free firm. However, the board of directors and promoters believe that a strategic investor will be the first choice.

According to those familiar with the situation, when the transaction with ZEE fell through owing to value issues, SPN attempted to combine with Viacom18. That contract fell through in October of last year, and SPN's parent business began hunting for new partners, they added.

Due to the rough treatment of stockholders, the purchase was likely to face legal challenges, with the Subhash Chandra family receiving an extra 2.1 per cent stake from Sony promoters as a non-compete fee.

Zee-Sony Merger - Challenges Companies may confront

The merger conditions include a non-compete agreement between the ZEEL promoters and Sony Pictures Networks India, with the ZEEL promoters receiving an additional 2.1 per cent interest in the combined firm.

Obtaining ZEEL shareholders' approval for the planned merger and the continuance of ZEEL's MD and CEO as the head of the merging company for the next five years may also pose hurdles, considering the tense relationship between certain institutional owners of ZEEL and the ZEEL board.

However, the amalgamated entity's planned structure's board of Directors may assuage institutional shareholders' worries. Because the Sebi Takeover Code exempts the acquisition of interest via a Scheme of Arrangement for amalgamation/merger, there will be no open offer for ZEEL shares.

The sale was accelerated when Invesco, one of ZEEL's significant owners, requested an emergency general meeting within three weeks to remove Goenka. After proxy advice companies reported corporate governance issues in the business that ZEEL later funded, two directors, Manish Chokhani and Ashok Kurien resigned from the ZEEL board.

sony and zee merger case study

Zee-Sony Merger - How is it Beneficial for Both Companies?

Analysts estimate that the transaction will create a new media and entertainment powerhouse in India, with revenues of Rs 15,000 crore.

According to analysts, the deal is a strategic match since Sony is a big player in the Hindi general entertainment channel (GEC) market, mainly non-fiction. Zee is strong in movies of all genres and the regional GEC area. Zee has a 17% network viewing share, whereas Sony has a 10-12% share. As a result, it would be a solid strategic match in broadcast, digital, and content.

In terms of synergies, Sony is performing well in sports and mainstream GEC, but Zee has a high recall on regional genres, which Sony has less of or none of. Sony's foreign repertoire would be available for ZEE to exploit and monetize.

With this acquisition, ZEE Entertainment's corporate governance issues should be resolved, boosting investor trust. Both companies have a robust film library that can be exploited for OTT and TV offerings . The combined firm will be better positioned to compete with Disney on both the distribution and advertising fronts.

According to Zee's annual report, its network in India connects over 3,000 brands with their customers.

According to ZEEL's aggregated figures, the company made a profit of Rs 800 crore on revenues of Rs 7,730 crore in the fiscal year ending March this year.

In March 2020, Sony Pictures Network India made a profit of Rs 976 crore on revenues of Rs 5,846 crore, with cash on books of Rs 11,000 crore.

Following the announcement of the merger, ZEEL's shares soared 32% to Rs 337 per share, valuing the company at Rs 32,378 crore.

sony and zee merger case study

ZEE and SPN are two of India's most popular media and entertainment companies , having strong consumer appeal across genres, languages, and platforms. The combination of these two companies will bring together the media industry's most powerful leadership teams, content creators , and high-quality series and film libraries, resulting in a combined content platform that can compete with domestic and global platforms while also accelerating the region's digital transition.

Is Sony and ZEE merging?

Zee had announced merger with Sony on September 22.

Who is the owner of Zee Entertainment?

News Corporation is the parent organization of Zee Entertainment and owns it.

Who is the CEO of ZEE?

Punit Goenka is the CEO of ZEE since 2008.

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August 23, 2023


sony and zee merger case study

Ashima Obhan

sony and zee merger case study

Aparna Amnerkar

On August 10, 2023, the National Company Law Tribunal, Mumbai (“ NCLT “) greenlit the merger of Zee Entertainment Enterprises Limited (“ Zee “) with Culver Max Entertainment Private Limited ( formerly Sony Pictures Networks India ) (“ Sony “) (hereinafter referred to as the “ Zee-Sony Merger “). Following the merger, the resulting entity will be the second largest entertainment network after Disney Star.

While the scheme of arrangement between Zee and Sony was endorsed by the required majority of creditors and 99.99% of Zee’s shareholders, it was met with a slew of objections when tabled before the NCLT for its approval. However, the NCLT disregarded the arguments placed by the applicants and authorised the scheme in its order dated August 10, 2023 (“ Order “) 1 .

While the matter was being heard by the NCLT, a number of entities (such as Axis Finance Limited, IBDI Trusteeship Services Limited, IMAX Corporation, IDBI Bank Limited and JC Flowers Asset Reconstruction Private Limited) that were creditors of Essel Group (which includes Zee) raised objections against the merger scheme. These creditors/petitioners raised two principal objections to the Zee-Sony Merger. First, they claimed that a Mauritius-based entity which was part of the Sony group had given Essel Mauritius, an entity of the Essel Group, a non-compete fee of more than INR 1,100 crores. Such a non-compete payment, according to the objectors, is bogus and a disguised mechanism to cheat lenders and the public shareholders of Zee. The creditors prayed that the funds used to pay this non-compete fee be used to recover the debts owed to the creditors. The creditors also argued that since Zee and other Essel Group entities to which such creditors had extended credit facilities belonged to the same group of companies, being under the common control and management of the same promoters, all such entities should be treated as one and accordingly, the creditors were qualified to raise their claims against Zee.

The NCLT in its Order found that the amounts owed to the objecting creditors/petitioners were due to such creditors by different entities of Essel Group and, in fact, Zee owed no debt to such creditors. The NCLT noted that there was no contractual relationship between the creditors and Zee, and was further of the opinion that the creditors may effectively be taking advantage of the Zee-Sony Merger to recover their outstanding debts, which were unrelated to the scheme before the NCLT. The NCLT was of the view that since none of the petitioners were direct creditors of Zee nor had any privity of contract with Zee whose scheme of merger was pending for approval before the bench, such creditors were not permitted to take part in the decision-making process for a scheme of arrangement. The NCLT categorically stated that the petitioners having failed in ensuring recovery of their alleged dues from other entities through legal proceedings initiated by them against such entities were opposing the scheme of Zee as a last resort for their recoveries.

According to Section 230(4) of the Companies Act, 2013 (“ Act “), only a person who holds at least 10% (ten percent) of a company’s shareholding, or has an outstanding debt of at least 5% (five percent), is eligible to raise objections to an arrangement. The NCLT observed that none of the creditors met these minimum requirements to have any locus standi in the proceedings. While the Order is predicated upon the facts and circumstances relating to each of the creditor’s objections or ties to the merger, the Order reiterates the requirements provided in Sections 230 to 232 of the Act.

The NCLT in the Order held that Zee is one of the entities of Essel Group and each entity of Essel group has its independent legal status with separate assets and liabilities and therefore, the scheme of merger of Zee which was approved by 99.997% of shareholders cannot be halted upon for the outstanding liabilities, if any, of the other entities of the same group. The NCLT also observed that since the merger scheme contemplates that all debts and liabilities of Zee will be transferred without any compromise to the resulting entity, even if a creditor had a valid claim against Zee, no objections could be raised by such a creditor to the merger scheme given that it had already been approved by the required majority of shareholders and creditors.

While ruling on the non-compete fee, the NCLT noted that had it not been for the payment of the non-compete fees to Essel Mauritius, the promoters of Zee could have competed with the business of the merged entity which would then be to the detriment of the shareholders of the merged entity. Therefore, in the opinion of the NCLT, the payment of the non-compete fee actually protects the shareholders of Zee (who will be shareholders of the merged entity). Further, since the non-compete fees payable to Essel Mauritius could only be utilised by it to purchase securities of the merged entity, payment of the non-compete fees can only be seen as a move beneficial to the shareholders of Zee. The NCLT opined that if there was anyone who could have objected to the merger scheme, that would be the shareholders of Zee, if they were able to show that they are receiving lesser number of shares in the merged entity as a result of the payment of the non-compete fee.

The NCLT in its Order cited the well-recognized rules outlined in the landmark case of Miheer Mafatlal v. Mafatlal Industries Limited , in which it was held that the NCLT is only permitted to interfere with the commercial wisdom of the shareholders and creditors who have approved a scheme only if that scheme is, ‘ unconscionable, illegal, unfair, or unjust to the class of shareholders or creditors for whom it is intended ‘. The NCLT observed that the petitioners had failed to prove the legal requirement set out in the above landmark case and therefore the NCLT did not feel the need to intervene in respect of certain terms of the merger scheme, such as the non-compete clause, especially since the scheme had already received support from the requisite majority of shareholders and creditors.

The second principal contention that was raised before the NCLT was with respect to the appointment of Mr. Punit Goenka as Managing Director and CEO for 5 (five) years of the resulting entity. This objection as placed before the NCLT in light of an interim order of the Securities Exchange Board of India (“ SEBI “) prohibiting Mr. Goenka from holding a position of a director in any publicly traded company.  The NCLT observed that since the merger scheme had been approved by the boards of Zee and Sony much before the SEBI order, the NCLT left it to the boards of the Zee and Sony to review the nomination of Mr. Goenka as Managing Director and CEO of the resulting entity.

While the merger scheme has now been approved by NCLT, the merged entity is required make the requisite filings with the Registrar of Companies within 30 (thirty) days of NCLT approval. It will then also need to receive the approval of the Ministry of Information and Broadcasting.



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Zee-Sony merger delay: Sony looks at a potential acquisition of Disney’s India business

Analysts say talks may gain momentum if zee merger isn’t completed by december.

Prerna Lidhoo

  • Updated Oct 16, 2023, 5:53 PM IST

Analysts say talks may gain momentum if Zee merger isn’t completed by December

  • Amid merger delays with Zee, Sony has initiated preliminary talks with Walt Disney Co. about a potential acquisition of its India business.
  • The company is looking at it as a contingency plan in case its ongoing merger agreement with Zee faces more delays or doesn't materialise since it has been in the works for almost two years
  • Sony-Disney will have a much larger TV ad market share of 45% v/s Zee-Sony TV ad market share of 25%

Amid the delay in the merger of Zee Entertainment Enterprises with Sony Pictures Entertainment (SPE), the global entertainment unit of Japan’s Sony Group, has initiated preliminary talks with Walt Disney Co. about a potential acquisition of its India business. The company is looking at it as a contingency plan in case its ongoing merger agreement with Zee faces more delays or doesn’t materialise since it has been in the works for almost two years.

The Zee-Sony merger received National Company Law Tribunal (NCLT) approval without any conditions on August 10. Since then, the company has been working on closing precedents (CPs) of the merger and it is expected that the merged company could be listed by December. “In case it gets pushed beyond December, there is a high likelihood that Sony may advance talks with Disney post that,” Karan Taurani, Vice President, Elara Capital, said.

According to Elara Capital, Sony is looking out for a strategic partner for its India and global (TV) business but it’s unlikely that the Disney-Sony deal will go through since there is a wider overlap for both platforms as they both cater to urban audience in a big way. “Regulatory approvals like CCI, NCLT may take over a year. CCI may not provide clearance or ask to shutdown channels, as Sony/Disney will have a much larger TV ad market share of 45 per cent (Zee/Sony TV ad market share is 25 per cent),” Taurani said.

Elara Capital said that Sony may have to shelve out much more capital to buyout Disney, as valuations for Disney India is potentially in the range of $4-6 billion (linear TV only) and $10-11 billion (linear TV and Hotstar). “We believe the Zee/Sony merger going through is of utmost importance for Zee’s valuations to sustain and we don’t foresee Sony taking a firm call to acquire Disney unless the merger is delayed,” he adds.

  • #Zee-Sony merger delay
  • #Sony merger
  • #Disney India
  • #Disney India business
  • #Zee merger


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Nclt allows zee’s application of merger with sony.

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The Mumbai bench of the National Company Law Tribunal (NCLT) on Thursday 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.

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Merger between two Mega-serial sagas: Sony and ZEE

  • Horizontal Merger: In this type of merger, two companies which are in direct competition consolidate. Example: Ford and Volvo, Disney+ and Hot Star  
  • Vertical Merger: Basically, both companies which merger have a customer- supplier relationship. Example: Ford and Bendix  
  • Conglomerate Merger: The companies which merge have no common business or no common relationship. They may sell related products. Example: Merger of a textile industry with an automobile industry.  
  • Concentric Merger: Companies which are going to merge have products complementary and supplementary to each other. Example: DVD company and DVD Player company
  • (last accessed on 21st Oct 2021)

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