Tech Mahindra and Satyam merger approved

Stocks

oi-Sneha

By Sneha B K

Published: Thursday, March 22, 2012, 16:57 [IST]

The Boards of Tech Mahindra and Mahindra Satyam, in their meeting held today approved the merger of both companies along with certain wholly owned subsidiaries.

Shares of Tech Mahindra on the BSE was trading up 0.51% at Rs 689, while the shares of Mahindra Satyam was trading lower 0.81% at Rs 73.55, after touching an intraday high of Rs 76.90.

The merged entity is expected to benefit from operational synergies, economies of sale, sourcing benefits and standardisation of business processes. This merger will create the fifth largest player in the listed IT players in the country.

The exchange ratio recommended and approved by both the boards was two shares of Tech Mahindra (Face value each Rs10), for every 17 shares of Mahindra satyam (Face value of Rs 2).

Tech Mahindra will issue 10.34 crore new shares, there by increasing its outstanding shares to 23.08 crore and its equity capital to Rs 230.8 crore, the company said in a filing with the Bombay Stock Exchange.

Vineet Nayyer, Vice Chairman and MD of Tech Mahindra and Chairman of Mahindra Satyam said, “ This merger is a key part of our strategy to deliver industry leading performance”.

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