Tata Steel to merge seven group companies with itself. All you want to know

In what is being called a mega merger, the Tata Group has decided to combine seven of its group companies with Tata Steel. 

This decision, the Tata Group says, is aimed at consolidating its metals businesses to drive efficiencies. 

So, which group companies are being merged 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 the parent. 

What is the share swap ratio under the merger scheme?

Tata Steel vs TRF: 17:10 (17 shares of Tata Steel for every 10 shares of TRF)
Tata Steel vs TSPL: 67:10 (67 shares of Tata Steel for every 10 shares of TSPL)
Tata Steel vs Tinplate: 33:10 (33 shares of Tata Steel for every 10 shares of Tinplate) 
Tata Steel vs Tata Metaliks: 79:10 (79 shares of Tata Steel for every 10 shares of Tata Metaliks)

What did Tata Steel have to say about its decision to merge the seven entities into itself?

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 said the merger will also result in utilisation of each other’s facilities in a more efficient manner. Marketing and distribution network of all entities can also be collaborated, it said.

"In line with group level 5S strategy – simplification, synergy, scale, sustainability, and speed – proposed Scheme will simplify group holding structure, improve agility to enable quicker decision making, eliminate administrative duplications, consequently reducing administrative costs of maintaining separate entities," Tata Steel said.

On Indian Steel & Wire, the steel major said the amalgamation will ensure creation of a combined entity, leading to ‘One-Tata Steel’ in front of customers which will improve shareholder value of the merged entity.

Does the merger plan need regulatory  and shareholder approval?

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.