Tech Mahindra, Satyam merger creates a $ 2.4 billion company
The merger will propel the combined entity into the top tier of Indian software and services companies.
The Boards of Directors of Tech Mahindra Limited (Tech Mahindra) and Satyam Computer Services Limited, (Mahindra Satyam), in their respective meetings held today, approved a proposal to merge Mahindra Satyam with Tech Mahindra along with certain wholly owned subsidiaries of Mahindra Satyam and Tech Mahindra.
The merger will result in the creation of a new offshore services company with revenues of approximately US$2.4 billion in revenues, approximately 75,000 plus strong work force and 350 plus 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,” said Anand G Mahindra, Chairman, Tech Mahindra.
The exchange ratio recommended by the valuers and approved by both the boards is 2 shares of Tech Mahindra (face value of Rs. 10 each), for every 17 shares of Mahindra Satyam (face value of Rs. 2 each).
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 & entertainment, banking financial services and insurance, retail and healthcare, said a statement from the company.
The combined entity will 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. Likewise Mahindra Satyam’s expertise in enterprise solutions will enable a more complete value proposition to be delivered to Tech Mahindra’s clients.
The merger will also benefit from operational synergies, economies of scale, sourcing benefits, and standardization of business processes.
Vineet Nayyar, Vice Chairman and Managing Director of Tech Mahindra and Chairman of Mahindra Satyam said “This merger is a key part of our strategy to deliver industry leading performance.”
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