Failed Merger With Sony Costed Zee Rs 432 Cr

The unsuccessful merger agreement between Zee and Culver Max Entertainment, the Sony Group Corporation's Indian media division, costed Rs 432 crore to the former, in merger-related expenses between 2023–2024 and 2022–2023, according to regulatory documents.

The firm incurred merger-related costs of Rs 256 crore in 2023–24 and Rs 176 crore in 2022–23, according to the documents. On January 22, 2024, Culver Max Entertainment and Zee Entertainment ended their merger agreement because of disagreements about the intended combined company's leadership and unfulfilled closure requirements.

Zee Entertainment faced impairment charges of Rs 331 crore in 2022–2023 as part of its portfolio rationalisation and to satisfy merger requirements since several of its businesses, notably Margo Networks, had to close. The company stated that because the losses from these entities had already been recorded in previous financial results, the impact on consolidated results in 2022–2023 was Rs 98 crore.

In addition, the business projected that it would need to pay Rs 32 crore in 2023–2024 to cover shutdown expenses. Zee Entertainment let off 15 per cent of its workforce as part of cost-cutting initiatives, and a recent restructuring resulted in employee termination costs of Rs 22 crore.

Zee Entertainment claimed there wouldn't be any significant negative effects in relation to the arbitration proceedings Culver Max Entertainment and Star India filed since it believes both arguments are implausible. In response to Zee Entertainment's claimed breaches of the merger agreement, Culver Max Entertainment has requested $90 million in termination fees with the Singapore International Arbitration Centre. In a similar vein, Star India filed a request for damages at the London Court of International Arbitration.