Tata Steel Mega-Merger With 7 Subsidiaries: Rationale, Swap Ratios & Deal Details

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Tata Steel Mega-Merger With 7 Subsidiaries: Rationale, Swap Ratios & Deal Details
Credit: © Reuters.

By Malvika Gurung

Investing.com -- In a move to consolidate businesses that share common synergies and unlock maximum value to shareholders, the leading steel manufacturing behemoth Tata Steel (NS: TISC ) will be amalgamating seven of its group companies with itself.

In a board meeting conducted on Thursday, Tata Steel’s board approved the amalgamation of its seven subsidiaries, Tata Steel Long Products (NS: TTST ), The Tinplate Company of India (NS: TINP ), Tata Metaliks (NS: TMET ), TRF Limited, the Indian Steel & Wire Products, Tata Steel Mining and S&T Mining Company with itself.

As per the company’s press release, the amalgamation will unlock opportunities to create shareholders’ value and result in focused growth, operational efficiencies, and synergy creation among businesses.

The company’s board has also withdrawn its earlier merger scheme between Tata Steel Long Products and Tata Metaliks.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.

  • TSPL - 67:10; For every 10 shares of TSPL, 67 Tata Steel shares will be given
  • TRF - 17:10
  • Tata Metaliks - 79:10
  • Tinplate - 33:10

The amalgamation deal is expected to result in better utilization of common facilities, sharing of best practices, elimination of duplication and multiplicity of compliance requirements and rationalization of administrative expenses, stated the release.

Tata Steel has reduced/eliminated 116 entities, including JVs, subsidiaries and associates since 2019.

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  • Aashish Jain @Aashish Jain
    Supply of tata steel shares will increase and therefore, can lead to some impact on share price
    Like 0
  • deepak agarwala @deepak agarwala
    Is it the golden moment for Tata Steel shareholders, pls clarify.
    Like 1

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