Tata Steel’s board has approved the scheme of amalgamation of all metal companies into Tata Steel, the company in a regulatory statement said on Friday.
"The Board of Directors of Tata Steel considered and approved schemes for the proposed amalgamation of six subsidiaries into and with Tata Steel," the statement issued by Tata Steel said.
The subsidiaries are Tata Steel Long Products Limited in which Tata Steel holds 74.91 per cent equity, The Tinplate Company of India Limited (74.96 per cent), Tata Metaliks Limited (60.03 per cent), The Indian Steel & Wire Products Limited (95.01 per cent equity holding), Tata Steel Mining Limited, and S & T Mining Company Limited (both wholly-owned subsidiaries). According to the statement, "Tata Steel Board approves the amalgamation of strategic businesses into the company.”
The Board has also approved the amalgamation of TRF Limited (34.11 per cent equity), an associate company of Tata Steel, into Tata Steel Limited.
Tata Steel further said the proposed amalgamation is aimed at driving synergies, simplifying the group holding and management structure, and consolidating and strategically growing downstream operations and engineering capabilities
The Board has considered the proposal based on independent fairness and valuation opinions. It followed the process laid down under the Companies Act, 2013 and Securities and Exchange Board of India Regulations.
According to the statement, the proposed merger will enhance management efficiency, drive sharper strategic focus, and improve agility across businesses based on the strong parental support from the Tata Steel leadership. "On completion, there will be further opportunities towards reduction of overhead and corporate costs. Each of the proposed amalgamations will be value-accretive for shareholders," the company said.
The Boards of all the amalgamating companies have also considered the proposals following due process and have unanimously approved the merger. The proposed amalgamation is also part of Tata Steel's continuing journey to simplify the group holding structure, the company said.
According to the statement, since 2019, Tata Steel has reduced 116 associated entities (72 subsidiaries have ceased to exist, 20 associates and JVs have been eliminated and 24 companies are currently under liquidation).
Shares of Tata Steel were trading at Rs 105.05 apiece, up 1.35 per cent on the BSE on Friday.