Tata Steel to merge with six subsidiary companies
The proposed amalgamation is aimed at simplifying the group holding and management structure, driving synergies and consolidating and strategically growing downstream operations and engineering capabilities.
FollowTata Steel will merge with six of its subsidiary firms after the Board of the company approved a proposal on Thursday.
In a statement on Friday, Tata Steel said that the firm's Board of Directors approved schemes for the proposed amalgamation of six subsidiaries into and with Tata Steel.
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The subsidiaries that are being amalgamated are the Indian Steel & Wire Products Limited (Tata Steel equity: 95.01 per cent equity holding), the Tata Steel Long Products Limited, in which Tata Steel has 74.91 per cent equity, the Tinplate Company of India Limited (Tata Steel equity: 74.96 per cent), the Tata Metaliks Limited (Tata Steel equity: 60.03 per cent), Tata Steel Mining Limited and S & T Mining Company Limited (both wholly-owned Tata Steel subsidiaries).
The statement said, 'Tata Steel Board approves the amalgamation of strategic businesses into the company.'
The Board also approved the amalgamation of TRF Limited (34.11 per cent equity) -- an associate firm of Tata Steel -- into Tata Steel Limited.
The proposed amalgamation is aimed at simplifying the group holding and management structure, driving synergies and consolidating and strategically growing downstream operations and engineering capabilities.
The Board has considered the proposal based on independent fairness and valuation opinions, Tata Steel said, adding that it followed the process laid down under the Securities and Exchange Board of India Regulations and Companies Act, 2013.
The proposed amalgamation will enhance and drive sharper strategic focus and management efficiency and improve agility across businesses based on the strong parental support from the Tata Steel leadership.
The company said: 'On completion, there will be further opportunities to reduce overhead and corporate costs. Each proposed amalgamation will be value-accretive for shareholders.'
The Boards of all the amalgamating firms, too, have vetted the proposals following due process and have unanimously approved the merger. The company said that the proposed amalgamation is also part of Tata Steel's continuing journey to simplify the group holding structure.
Tata Steel has since 2019 reduced 116 associated entities. Of these, 72 subsidiaries have ceased to exist, 20 joint ventures and associates have been eliminated and 24 firms are currently under liquidation.
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