The board of Tata Steel has apaproved the plan to merge with itself and seven other companies of its group, the company said in regulatory filing. These merged entities include Indian Steel & Wire Products, Tata Steel Mining, Tata Steel Long Products, The Tinplate Company of India, Tata Metaliks, TRF Limited, Tata Steel, and S&T Mining Company.
The audit committee and the committee of independent directors both looked into the amalgamation plan and made recommendations to the board. According to a press statement from Tata Steel, the combined entity's resources have been pooled to maximise the potential for increasing shareholder value. According to the document, the share exchange ratio was determined for each of the seven companies separately.
The proposed merger is also a step in Tata Steel's ongoing effort to streamline the organisation of its group holdings. According to the company's news statement, Tata Steel has dissolved 116 connected organisations since 2019 (72 subsidiaries have ceased to exist, 20 Associates and JVs have been terminated, and 24 firms are currently in the liquidation process).
Each merger plan will now proceed via a clear regulatory approval procedure, which includes approval from stock exchanges and the NCLT.
The combination is anticipated to produce operational efficiency, focused growth, and business synergies. The planned amalgamation will simplify the group holding structure by removing many firms from the group, which is in keeping with the group level 5S strategy of simplification, synergy, scale, sustainability, and speed. It is anticipated that this will result in a better use of shared resources, the exchange of best practises, the removal of redundant and inconsistent compliance requirements, and the rationalisation of administrative costs, among other things.
The resulting corporate holding structure is anticipated to increase the merged entity's business ecosystem's adaptability.