Tech Mahindra, Mahindra Satyam to merge (Lead)March 21st, 2012 - 4:14 pm ICT by IANS
Mumbai, March 21 (IANS) Two IT companies belonging to the Mahindra Group said Wednesday they would merge into a single unit.
Mahindra Satyam, the erstwhile Satyam Computers that was taken over by the Mahindra Group, will be merged with Tech Mahindra with a share swap ratio of 8.5:1.
The Hyderabad-based Satyam Computers was put up for auction after its founder chairman B. Ramalinga Raju admitted to perpetrating a $1.5 billion fraud, bringing the company to the brink of a collapse.
“The exchange ratio recommended by the valuers and approved by the boards is two shares of Tech Mahindra (face value of Rs.10 each), for every 17 shares of Mahindra Satyam (face value of Rs.2 each),” the companies said in a joint statement on the regulatory filing.
Mahindra Group will own 26.3 percent in the combined entry and British Telecom 12.8 percent, while 10.4 percent will be held as treasury stock.
The public shareholders of Mahindra Satyam will hold 34.4 percent and the balance 16.1 percent will be held by public shareholders of Tech Mahindra.
Tech Mahindra will issue 10.34 crore new shares thereby increasing its outstanding shares to 23.08 crore and its equity capital to Rs.230.8 crore.
The merger will result in combined revenues of approx $2.4 billion along with over 350 active clients across 54 countries.
“This merger will help propel the combined entity into the top tier of Indian software and services companies, achieving the group’s key objective of being in a leadership role in each of our focus business areas,” Anand G. Mahindra, Tech Mahindra chairman, said.
Following the merger, the revenues would be well balanced with a diversified global footprint that would boast of contribution from Americas at 42 percent, Europe at 35 percent and emerging markets at 23 percent.
At the Bombay Stock Exchange the shares of Tech Mahindra were 2.72 percent up trading at Rs.666 in afternoon trade, while that of Satyam Computer Services rose 3.3 percent to rule at Rs.76.60.
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