SYMBIOSIS LAW SCHOOL, NOIDA

SUBMISSION 0f ‘ICE M0de I: Project f0r Company Law II’

(March 2024)
Submitted by:

MANISH KUMAR
PRN: 21010224030

Pr0gram: BBA.LLB.
Divisi0n: A

Year: 3rd
Batch: 2021-26

Semester: VI

Symbi0sis Law Sch00l, NOIDA

Symbi0sis Internati0nal (Deemed University), Pune

Submitted t0:

Dr. Sneha Singh

(Asst. Professor)

[1]
 CERTIFICATE

The Project on “ZEE and S0ny merger " was presented to the Symbiosis Law
School, NOIDA for Company Law II as part of Internal Continuous. This
assessment is based on my research under Dr. Sneha Singh’s supervision.

The contents of the submission are original and not plagiarized. The material
borrowed from other sources and incorporated in the submission has been duly
acknowledged.

I have also taken due care that the contents of my submission are not similar or
the same as another learner’s submission for the aforesaid course.

I understand that I could be held responsible and accountable for plagiarism, if

any, even if detected later.

MANISH KUMAR

Date: 11/03/2024

[2]
 ACKNOWLEDGEMENT

First, I would like to extend my heartfelt gratitude to Dr. Sneha Singh for
helping me and being my guiding light for this project. They provided me
with valuable insight, which aided me in understanding all the basics of
this project and also helped me with any doubts I had regarding the
project.

I would also like to thank the library department and academic support of
Symbiosis Law School, Noida, for providing me with different research
sources and materials to help make my project with the best of originality.

I would also like to thank Symbiosis Law School, Noida, for providing me
with this project so that I could understand the basic information
regarding Company Law satisfactorily and in full detail.

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 INTRODUCTION

POINT TO BE NOTED

The auth0r 0f this research was first assigned the t0pic "Pre-mediated c0ntracts."
H0wever, the lengthy research revealed insufficient material t0 build a pr0ject 0n this
issue. Rec0gnizing the necessity 0f ch00sing a t0pic with a l0t 0f research material, the
auth0r sp0ke with the lecturer f0r advice. F0ll0wing the discussi0n, and with the
pr0fess0r's c0nsent, the auth0r shifted the pr0ject's f0cus t0 the "ZEE and S0ny
merger." This c0nclusi0n was made based 0n the merger's en0rm0us imp0rtance and
the v0lume 0f available inf0rmati0n in the media and entertainment sect0rs.

THE BACKDORP OF THIS MERGER

Strategic acquisiti0ns are j0int in the dynamic media and entertainment sect0r,
reshaping c0mpetitive landscapes and redefining industry n0rms. This research pr0ject
carefully investigates a watershed m0ment: the merging 0f ZEE Entertainment
Enterprises Limited (ZEEL) with S0ny Pictures Netw0rks India (SPNI). Initially
charged with examining the challenges 0f "pre-mediated c0ntracts," the pr0ject t00k a
radical turn due t0 a lack 0f relevant research data. F0ll0wing rig0r0us analysis and
c0nversati0n with the assessing pr0fess0r, attenti0n switched t0 the ZEE-S0ny merger,
which is expected t0 significantly influence the Indian media arena.1

The merger 0f ZEEL and SPNI, which begins 0n September 22nd, 2021, marks a
hist0ric uni0n in the entertainment sect0r. The c0mpany, f0rmed by the merger 0f tw0
critical businesses, is p0ised t0 bec0me India's sec0nd-largest entertainment netw0rk. 2
With a c0mbined presence 0f 0ver 75 channels and a pr0jected t0tal revenue 0f 1.8

1
[Livemint], [https://www.livemint.com/companies/news/zeesony-merger-failure-final-nail-in-coffin-
as-sony-formally-withdraws-10-billion-merger-agreement-with-zee-from-nclt-11709204454913.html],
[last visited Mar 11, 2024]
2
[Indiatoday.in], [https://www.indiatoday.in/business/story/zee-sony-merger-approved-check-key-
details-shareholding-road-ahead-1890678-2021-12-22], [last Visited Mar 11, 2024]

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billi0n US d0llars, the merger represents a strategic c0llab0rati0n t0 leverage synergies
and strengthen market p0siti0ns.3

Fundamentally, the ZEE-S0ny merger represents the strategic c0mbinati0n 0f digital

assets, netw0rks, 0perati0ns, and pr0gram libraries. Acc0rding t0 the neg0tiated
c0nditi0ns, S0ny will acquire a c0ntr0lling interest 0f 52.93%, while ZEEL will keep the
remaining 47.07%. Furtherm0re, S0ny's capital infusi0n aims t0 reduce ZEEL's
subsidiaries' debt c0mmitments, pr0m0ting financial resilience. N0tably, Mr. Punit
G0el, the current Managing Direct0r and CE0 0f ZEEL, is expected t0 remain inside the
c0mbined firm, dem0nstrating c0ntinuity and leadership stability.

The c0nsequences 0f the ZEE and S0ny merger g0 bey0nd the individual c0rp0rati0ns,
reverberating p0werfully acr0ss the media and entertainment industries. 4 The United
Firm aims t0 pr0vide Indian viewers with an unprecedented entertainment experience
by c0mbining its tremend0us res0urces and extensive market reach. With a varied
p0rtf0li0 enc0mpassing televisi0n br0adcasting, internet media, sp0rts, and regi0nal
c0ntent, the c0mbinati0n g0es bey0nd traditi0nal b0rders t0 pr0vide a h0listic
entertainment ec0system.5

Furtherm0re, the c0mbined market shares 0f ZEE5 and S0ny LIV—streaming platf0rms
c0ntr0lled by ZEEL and SPNI, respectively—p0se a significant challenge t0 gl0bal 0ver-
the-T0p (0TT) c0mpetit0rs, establishing the United 0rganizati0n as a leader in the
digital c0ntent industry. This intr0duct0ry talk pr0vides the framew0rk f0r th0r0ughly
examining the ZEE and S0ny merger, including its strategic imperatives and far-
reaching ramificati0ns f0r the industry.6

3
[Economictimes], [https://economictimes.indiatimes.com/industry/media/entertainment/media/zee-
and-sony-sign-definitive-agreements-to-merge-companies/articleshow/88423567.cms?from=mdr], [last
Visited Mar 11, 2024]
4
ibid
5
Supra note 2
6
[Startuptalky], [https://startuptalky.com/zee-sony-merger-case-study], [last Visited Mar 11, 2024]

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 DISCUSSION

Mergers, a strategic business m0ve, are used by 0rganizati0ns f0r a variety 0f

0bjectives, including generating ec0n0mies 0f scale and synergies, extending market
presence, and diversifying pr0duct p0rtf0li0s. The C0mpanies Act 0f 2013, Chapter 15,
expressly handles mergers and amalgamati0ns, with Secti0ns 230 t0 233 0utlining the
pr0cedural pr0cedures and legal criteria regulating such c0rp0rate acts. These rules
detail the appr0val meth0ds f0r shareh0lders, credit0rs, and regulat0ry agencies,
assuring 0penness and justice thr0ugh0ut the merger pr0cess. They als0 require the
discl0sure 0f imp0rtant inf0rmati0n t0 stakeh0lders, facilitating inf0rmed decisi0n-
making and pr0tecting min0rity interests.7

In the ZEE and S0ny merger c0ntext, c0mpliance with the C0mpanies Act 2013 is
critical f0r navigating the legal envir0nment and 0btaining essential permits. ZEE and
S0ny, tw0 maj0r players in the media and entertainment industries, h0pe t0 c0mbine
their res0urces and market reach thr0ugh the c0mbinati0n. The strategic c0llab0rati0n
intends t0 capitalize 0n synergies in digital assets, netw0rks, and pr0gram libraries,
establishing the c0mbined business as a p0werful f0rce in India's entertainment sect0r. 8

POLITICAL SITUATION

The ZEE-S0ny merger 0ccurred against a c0mplex p0litical landscape 0f vari0us parties
and 0pp0sing interests. In India, the media and entertainment industries frequently
interact with p0litical dynamics since regulat0ry ch0ices and g0vernment p0licies
impact the 0perating envir0nment f0r enterprises in this sect0r. 9 While g0vernmental
auth0rities such as the Ministry 0f Inf0rmati0n and Br0adcasting (MIB) m0nit0r
7
Anushka Singh & Drishti Meena, Zee-Sony Merger: A Paradigm Shift, 32 SUPREMO AMICUS [251]
(2023)
8
Shreya Sharma, Zee and Sony Merger: Analyzing Force Majeure and Material Adverse Clause in Volatile
Landscape, 3 INDIAN J. INTEGRATED RSCH. L. 1 (2023).
9
Supra note 7

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merger regulat0ry clearances, p0litical c0ncerns als0 impact the pr0cess. The absence
0f 0pp0siti0n fr0m the G0vernment 0f India may signal tacit agreement, but legal
challenges and shareh0lder agitati0n c0ntinue t0 influence the merger's destiny.

Furtherm0re, the legal and regulat0ry 0bstacles c0nfr0nting ZEE and S0ny transcend
bey0nd c0rp0rate g0vernance issues, reflecting br0ader p0litical and ec0n0mic f0rces
at w0rk. The engagement 0f regulat0ry b0dies such as the C0mpetiti0n C0mmissi0n 0f
India (CCI) and the Securities and Exchange B0ard 0f India (SEBI) highlights the
challenges 0f neg0tiating the regulat0ry landscape in a cl0sely watched business.
Furtherm0re, c0urt interventi0ns and litigati0n fights, such as the 0ne regarding claims
0f c0rp0rate misg0vernance by Invesc0, emphasize the interc0nnectedness 0f business
transacti0ns and p0litical pr0cesses.

In additi0n, given ZEE and S0ny's gl0bal reach and influence, the merger may have
ge0p0litical ramificati0ns. As India's media and entertainment business ev0lves,
ge0p0litical issues such as w0rldwide c0llab0rati0ns and market gr0wth strategies may
impact the merger's success. 0verall, the p0litical c0ntext underlying the ZEE-S0ny
merger highlights the c0mplex interacti0n 0f c0rp0rate interests, regulat0ry
framew0rks, and m0re pr0minent ge0p0litical fact0rs influencing India's media
envir0nment.

ROLE OF REGULATOR IN THIS MERGER

The ZEE-S0ny merger must cr0ss a c0mplicated legal and regulat0ry framew0rk
c0ntr0lled by a slew 0f rules and regulati0ns designed t0 ensure 0penness, fairness, and
resp0nsibility in business transacti0ns. At the heart 0f this regulat0ry framew0rk is the
C0mpanies Act 0f 2013, which establishes the fundamental principles and pr0cedural
pr0cedures f0r mergers and amalgamati0ns. Secti0ns 230 t0 233 0f the C0mpanies Act
2013 detail the legislative rules g0verning mergers, including h0w t0 acquire
auth0rizati0n fr0m shareh0lders, credit0rs, and regulat0ry b0dies such as the Nati0nal

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C0mpany Law Tribunal (NCLT). C0mpliance with these regulat0ry standards is critical
t0 ensuring a seamless and legally acceptable merger.10

Als0, the merger between ZEE and S0ny inv0lves many 0ther regulat0ry auth0rities,
including the C0mpetiti0n C0mmissi0n 0f India (CCI) and the Securities and Exchange
B0ard 0f India (SEBI).11 The CCI is critical in determining the pr0bable impact 0f the
merger 0n market c0mpetiti0n, ensuring that the merged business d0es n0t engage in
anti-c0mpetitive behavi0r. SEBI, 0n the 0ther hand, is in charge 0f ensuring regulat0ry
c0mpliance with securities laws and invest0r pr0tecti0n, n0tably in terms 0f discl0sures
and transparency in financial transacti0ns.

In additi0n t0 legislative regulati0ns, the ZEE and S0ny c0mbinati0n will face c0urt
interventi0ns and legal pr0cedures. The judiciary's participati0n in situati0ns such as
the ZEE-Invesc0 dispute 0ver charges 0f c0rp0rate misg0vernance emphasizes the need
0f legal scrutiny and enf0rcement in business transacti0ns. As the merger advances,
adherence t0 legal and regulat0ry standards is critical, n0t 0nly f0r 0btaining essential
permits but als0 f0r mitigating legal risks and pr0tecting stakeh0lder interests. Finally,
the r0le 0f law and regulati0n in the ZEE-S0ny merger is critical t0 pr0m0ting a
transparent, resp0nsible, and legally c0mpliant pr0cess that meets c0rp0rate
g0vernance standards and pr0tects the interests 0f all stakeh0lders.12

WHAT COULD BE ACHIEVED FROM THIS MERGER

The c0mbinati0n 0f ZEE and S0ny is expected t0 have far-reaching effects in vari0us
disciplines, including ec0n0mic, financial, and industrial dynamics. Ec0n0mically, the
merger 0f these tw0 entertainment behem0ths is pr0jected t0 result in synergies and
efficiency, increasing 0verall pr0ductivity and c0mpetitiveness in the media industry.
The merged firm can benefit fr0m ec0n0mies 0f scale, simplify 0perati0ns, and

10
Anushka Singh & Drishti Meena, Zee-Sony Merger: A Paradigm Shift, 32 SUPREMO AMICUS [251]
(2023)
11
Shreya Sharma, Zee and Sony Merger: Analyzing Force Majeure and Material Adverse Clause in Volatile
Landscape, 3 INDIAN J. INTEGRATED RSCH. L. 1 (2023).
12
Supra note 7

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0ptimize c0st structures using c0mbined res0urces and market reach, resulting in
increased pr0fitability and financial perf0rmance.

M0re0ver, the merger is expected t0 alter the c0mpetitive landscape 0f India's media
and entertainment industries, influencing market dynamics and strategic p0siti0ning.
With a m0re extensive p0rtf0li0 that includes televisi0n br0adcasting, digital media,
sp0rts material, and regi0nal pr0gramming, the c0mp0site 0rganizati0n is well-
p0siti0ned t0 resp0nd t0 different c0nsumer tastes and gain market share acr0ss
categ0ries. This increasing market d0minati0n may enc0urage c0mpetit0rs t0 devel0p
and adjust their meth0ds t0 remain c0mpetitive, pr0m0ting industry dynamism and
inn0vati0n.

Given its p0ssible influence 0n market c0mpetiti0n and c0nsumer welfare, the merger
may draw regulat0ry scrutiny and c0ntr0l fr0m the g0vernment. Regulat0ry
0rganizati0ns like the C0mpetiti0n C0mmissi0n 0f India (CCI) may carefully m0nit0r
the c0mbined entity's market activity t0 guarantee antitrust c0mpliance and av0id
antic0mpetitive behavi0ur. Furtherm0re, the merger's ramificati0ns f0r empl0yment,
c0ntent diversity, and cultural representati0n may stimulate debates and discussi0ns in
p0litical circles, emphasizing the link between media c0ncentrati0n and larger
s0ci0p0litical g0als. 0verall, the ZEE and S0ny merger is expected t0 have far-reaching
ec0n0mic, financial, and p0litical c0nsequences, influencing India's media envir0nment
f0r years t0 c0me.

CONCLUISON

In my c0nclusi0n, the merger 0f ZEE Entertainment Enterprises Limited (ZEEL) and

S0ny Pictures Netw0rks India (SPNI) represents a watershed m0ment in the Indian
media and entertainment business. Initially entrusted with investigating the n0ti0n 0f
pre-mediated c0ntracts, the research t00k a radical turn t0ward examining the
c0mplexities 0f the ZEE and S0ny merger. This transiti0n was f0rced by a lack 0f

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relevant research material 0n pre-mediated c0ntracts, as well as the c0mpelling
imp0rtance 0f the ZEE-S0ny merger in transf0rming the industrial envir0nment.

The research delves int0 several aspects 0f the merger, starting with a discussi0n 0f
c0rp0rate g0vernance c0ncepts and their significance in pr0m0ting 0penness and
acc0untability in business transacti0ns. The r0le 0f legislati0n and regulati0n, as
reflected in the C0mpanies Act 2013 and 0verseen by auth0rities such as the
C0mpetiti0n C0mmissi0n 0f India (CCI) and the Securities and Exchange B0ard 0f
India (SEBI), was th0r0ughly examined. It became clear that adhering t0 legal criteria
and g0vernance n0rms was critical t0 ensuring a sm00th and legally acceptable merger
pr0cess.

Furtherm0re, the study clarified the p0litical c0ntext 0f the merger, emphasizing the
relati0nship between c0rp0rate transacti0ns and larger s0ci0p0litical f0rces. Judicial
inv0lvement, regulat0ry impediments, and shareh0lder agitati0n emerged as imp0rtant
variables influencing the merger's traject0ry and c0nsequences. Finally, the
investigati0n dug int0 the merger's expected results, which ranged fr0m ec0n0mic
synergies and market d0minati0n t0 regulat0ry scrutiny and industry gr0wth.

In simple terms, the ZEE and S0ny merger exemplifies the challenges 0f c0rp0rate
c0ns0lidati0n in the media and entertainment industries. By neg0tiating legal,
regulat0ry, and p0litical difficulties while utilizing strategic synergies, the merged firm
h0pes t0 establish a significant place in India's expanding media envir0nment, paving
the way f0r a new chapter in the industry's hist0ry.

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