afaqs! news bureau

Zee spent Rs 432 crore on failed merger with Sony Group Corporation

The firm's merger-related costs were Rs 256 crore in 2023-24 and Rs 176 crore in the previous year.

According to regulatory filings, Zee Entertainment spent Rs 432 crore in merger-related costs over 2023-24 and 2022-23 for its failed merger deal with Culver Max Entertainment, the India media unit of Sony Group Corporation.

As per the filings, the firm's merger-related costs were Rs 256 crore in 2023-24 and Rs 176 crore in the previous year. Culver Max Entertainment terminated its merger agreement with Zee Entertainment on January 22, 2024 due to issues regarding the leadership of the proposed merged entity and unmet closing conditions.

As part of its portfolio rationalisation and to meet merger conditions, Zee Entertainment incurred impairment charges of Rs 331 crore in 2022-23 due to the closure of certain businesses, including Margo Networks. The company reported that the impact on consolidated results was Rs 98 crore in 2022-23, as the losses from these entities had been recorded in earlier financial results.

Furthermore, the company estimated a liability of Rs 32 crore in 2023-24 to fund closure costs. As part of cost-cutting measures, Zee Entertainment reduced its headcount by 15% and incurred an employee termination cost of Rs 22 crore due to a recent restructuring.

Regarding the arbitration cases filed by Culver Max Entertainment and Star India, Zee Entertainment asserted that there would not be any material adverse impact, as it considers both cases untenable. Culver Max Entertainment has approached the Singapore International Arbitration Centre, seeking $90 million in termination fees from Zee Entertainment over alleged violations of the merger agreement. Similarly, Star India has moved the London Court of International Arbitration seeking damages.

Have news to share? Write to us