Tata Group is on their way to have a Mega Merger of all its Metal Companies. In an attempt to consolidate its metal business to drive efficiencies and reduce costs, the Tata Group on Friday announced the merger of seven of its metal companies into Tata Steel.
The board of Tata Steel approved the amalgamation of seven of its subsidiaries – Tata Steel Long Products, Tata Metaliks, The Tinplate Company of India, TRF, Indian Steel & Wire Products, Tata Steel Mining and S&T Mining into and with their parent company Tata Steel.
The company has withdrawn the earlier merger scheme of Tata Metaliks and Tata Steel Long Products (TSPL). The decision was taken at a board meeting of the company held yesterday, an exchange filing said.
Explaining the rationale behind the merger scheme, Tata Steel said the resources of the merged entities can be pooled to unlock the opportunity for creating shareholder value. Besides citing other synergies, it also said the mergers will result in utilization of each other’s facilities in a more efficient manner. Marketing and distribution networks of both entities can be collaborated, it said.
The mega-merger plan would require the approval of shareholders of all the seven companies as well as those of Tata Steel, regulatory bodies and stock exchanges.
Under the leadership of N Chandrasekaran, the Tata Group has been trying to consolidate its businesses that share common synergies. Earlier this year, the group had announced the merger of Tata Consumer and Tata Coffee. This week’s media reports have said that the Tatas are now planning to consolidate airline companies – AirAsia India and Vistara – under the Air India brand by 2024.