Tata Steel to amalgamate 7 subsidiaries in mega merger
28 Sep 2022
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Tata Steel will be amalgamating seven of its group companies with itself, in order to consolidate businesses that share common synergies and unlock maximum value to shareholders.
Tata Steel’s board at its meeting on Thursday approved the amalgamation of its seven subsidiaries - Tata Steel Long Products, The Tinplate Company of India, Tata Metaliks, TRF Limited, Indian Steel & Wire Products, Tata Steel Mining and S&T Mining Company - with the parent company.
These include subsidiaries that are majority owned by Tata Steel such as:
- Tata Steel Long Products Limited (74.91% equity);
- The Tinplate Company of India Limited (74.96% equity);
- Tata Metaliks Limited (60.03% equity);
- The Indian Steel & Wire Products Limited (95.01% equity); and
- Tata Steel Mining Ltd and S & T Mining Co (both wholly owned).
The board also approved the amalgamation of TRF Limited (34.11% equity) into Tata Steel Limited.
The amalgamation will unlock opportunities to create shareholders’ value and result in focused growth, operational efficiencies, and synergy creation among businesses, the company stated in a press release.
The company’s board has also withdrawn its earlier merger scheme between Tata Steel Long Products and Tata Metaliks.
The mega-merger deal will seek approval of all seven Tata Steel companies’ shareholders, stock exchanges and the NCLT, and aims to simplify the holding structure of the steel company.
The steelmaker’s board has approved swap ratios for 4 companies under the merger scheme.
For every 10 shares of Tata Steel Long Products Limited, 67 shares of Tata Steel Limited;
For every 10 shares of The Tinplate Company of India Limited, 33 shares of Tata Steel Limited;
For every 10 shares of Tata Metaliks Limited, 79 shares of Tata Steel Limited; and
For every 10 shares of TRF Limited, 17 shares of Tata Steel Limited.
The amalgamation deal is expected to result in better utilisation of common facilities, sharing of best practices, elimination of duplication and multiplicity of compliance requirements and rationalisation of administrative expenses, stated the release.
Tata Steel has reduced/eliminated 116 entities, including JVs, subsidiaries and associates since 2019.
The proposal is based on independent fairness and valuation opinions, and according to the process laid down under the Companies Act, 2013 and Securities and Exchange Board of India Regulations, the release added.
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