Satyam re-dubbed Tech Mahindra as merger completed
26 Jun 2013
Tech Mahindra Ltd, the information technology arm of Mahindra & Mahindra Ltd, on Tuesday evening announced the completion of absorbing Satyam Computer Services, the scam-hit company that it acquired through a government-managed auction in 2009 (See: Tech Mahindra edges out L&T to acquire Satyam).
The new entity will retain the parent's identity and be called Tech Mahindra. So far it has been provisionally dubbed as Mahindra Satyam.
Anand Mahindra, chairman of M&M, will also be chairman of the combined entity. Vineet Nayyar and C P Gurnani, who nursed Satyam back to health after M&M bought it at an April 2009 auction, were named executive vice-chairman and managing director respectively.
''Today we have fulfilled the commitment made in 2009, when we acquired Satyam, to jointly become one of the largest, diversified players leveraging technology for business solutions,'' Mahindra said in a statement to the stock exchanges.
''Tech Mahindra is a testimony to the tireless efforts of our associates and the trust reposed in us by our investors. I'm confident that we are now geared to grow even faster in the future.''
Satyam Computer, established in 1987, was counted as the fourth largest Indian IT firm by revenue when, in January 2009, founder-chairman B. Ramalinga Raju confessed to having fudged the company's accounts to create the biggest corporate scam in Indian history, said to be worth over Rs7,000 crore over several years.
The new management rebranded it Mahindra Satyam, although it continued to trade on the bourses as Satyam Computer.
In the financial year ended 31 March, Tech Mahindra had combined revenue of $2.67 billion ($1.41 billion Satyam + $1.26 billion Tech Mahindra) and a joint workforce of 83,565 people (36,067 Satyam + 47,498 Tech Mahindra).
Apart from reviving Satyam Computer, which had a better business mix than Tech Mahindra which depended heavily on telecom clients, the new management also had to battle litigation both in India and abroad.
The last of overseas litigations was settled in December last year. At home, the company is contesting a tax claim by the income tax department and a Rs822 crore Enforcement Directorate attachment order.
The completion of the merger follows a legal battle with some unsecured creditors and a group of minority shareholders seeking to stall the merger.
The Andhra Pradesh high court endorsed the merger on 11 June, putting an end to the eight-month-long legal battle (See: Andhra High Court okays Satyam-Tech Mahindra merger).
