Andhra High Court okays Satyam-Tech Mahindra merger
11 Jun 2013
The Andhra Pradesh High Court today cleared the decks for the merger of Mahindra Satyam (formerly Satyam Computer Services) with Tech Mahindra, paving way for the creation of the country's fifth-largest information technology firm.
Allowing the merger, Justice NRL Nageswara Rao of the Andhra Pradesh High Court dismissed petitions filed by 35 entities, including those by family members of Satyam founder Ramalinga Raju and entities owned by engineering and construction firm IL&FS as also minority shareholders opposing the merger.
While the Raju family and IL&FS sought refund of Rs1,230 crore they claim to have lent Satyam before the 2009 crisis, minority shareholders objected to the merger ratio. They alleged that Mahindra group fixed the swap ratio - two equity shares of Rs10 each of Tech Mahindra for every 17 shares of Rs2 each of Satyam - in its favour.
The board of directors of Mahindra Satyam had as far back as in March 2012 announced its decision to merge it with Tech Mahindra. But the decision has been hanging fire for want of court clearance.
The two, however, have been functioning as one entity with C P Gurnani as the common chief executive, with joint go-to-market strategies since March 2012. They also have strategic business leaders to take care of the two businesses.
The court, however, said all investigations into the accounting fraud at Satyam would continue.
Once merged the Tech Mahindra-Satyam combine will be the fifth largest Indian IT company after TCS, Infosys, Wipro and HCL.
Mahindra Satyam and Tech Mahindra, along with their subsidiaries, employ about 80,000 professionals and have combined revenue of about $2.5 billion.
