The planned merger between Zee Entertainment and Sony Pictures Networks India is one step closer to fruition after an appellate court struck down an order by the National Company Law Tribunal (NCLT) that had shrouded the deal in doubt.
What Happened? The National Company Law Appellate Tribunal (NCLAT) set aside an order by the company law tribunal that directed the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) to reassess their respective approvals for the merger.
The NCLT had mandated the exchanges to conduct a thorough review of the payment method used for the non-compete fee between two Mauritius entities and to ensure its alignment with relevant policies of the Securities and Exchange Board of India (SEBI).
The directive had come after SEBI asked the two stock exchanges to inform the NCLT of a ruling against a promoter entity of Essel Group, which had founded Zee.
Zee and Sony in December 2021 inked a deal to merge their businesses to form a media firm worth $10 billion (₹82,614.50 crore). The merger has been cleared by BSE, NSE, and Zee shareholders and has received conditional approval from the Competition Commission of India (CCI).
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The deal has been fraught with a string of hurdles ever since, with a number of creditors opposing the scheme of the merger.
Price Action: Zee’s share price shot up 6.12% to ₹189.80 in afternoon trade, following the verdict by the appellate tribunal.
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