The Boards of Directors of Tech Mahindra Limited (“Tech Mahindra”) and Satyam Computer Services Limited, (“Mahindra Satyam”), in their respective meetings held yesterday, approved a proposal to merge Mahindra Satyam with Tech Mahindra along with certain wholly owned subsidiaries of Mahindra Satyam and Tech Mahindra.
As part of this merger, the Mahindra Group will own 26.3% in the combined entity, British Telecom will own 12.8%, 10.4% will be held as treasury stock, 34.4% to be held by the public shareholders of Mahindra Satyam and the balance 16.1% will be held by the public shareholders of Tech Mahindra.
The merger will result in the creation of a new offshore services leader with revenues of approximately US$2.4bn in revenues, approximately 75,000+ strong work force and 350+ active clients (including Fortune Global 500 companies), across 54 countries, representatives said.
The joint entity will have a unified “go-to-market‟ strategy with deep competencies and a balanced mix of revenues from telecom, manufacturing, technology, media and entertainment, banking financial services and insurance, retail and healthcare, it was reported.
The combined entity is expected to leverage Tech Mahindra‟s expertise in mobility, system integration, and delivery of large transformations and to better penetrate the opportunity presented by Mahindra Satyam‟s diverse set of clients across multiple verticals. In addition, the merger will benefit from operational synergies, economies of scale, sourcing benefits, and standardisation of business processes, company representatives said.
Commenting on the merger Anand G Mahindra, chairman, Tech Mahindra said, “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”.
Vineet Nayyar, vice Chairman and MD of Tech Mahindra and chairman of Mahindra Satyam said “This merger is a key part of our strategy to deliver industry leading performance”.
C.P. Gurnani, director and CEO of Mahindra Satyam said, “The Mahindra Satyam turnaround is a shining story of determination and grit and now comes to its most important chapter, with this merger. As enterprises the world over look to bolster their IT strategies to keep pace in the connected world, this merged entity will provide the perfect blend of capability to address this evolving market.” he added.