NEW DELHI : Seventeen months after announcing an exercise to simplify its diverse business portfolio, Tata Steel has amalgamated five of nine strategic businesses.
The five companies include Tata Steel Mining Limited, Tata Steel Long Products Limited, The Tinplate Company of India Limited, Tata Metaliks Limited and S&T Mining Company Limited. “The merger of five companies with a cumulative annual turnover of Rs 19,700 cr in FY23, in record time, presents a unique opportunity for consolidation of the downstream operations,” said Tata Steel in an exchange filing.
Tata Steel had in September 2022 and to Subsequent dates announced its intention to amalgamate nine strategic businesses. The company, however, will go with 8 amalgamations as it has decided to exclude TRF Ltd.
“In the case of TRF Ltd., the Boards of both the companies have decided not to pursue the amalgamation process. Since the announcement of the intended merger of TRF Ltd. in September 2022, Tata Steel has been providing significant operational and financial support by way of placement of orders and infusion of funds. With the active support from Tata Steel, TR has successfully navigated a highly challenging operating environment, witnessing a turnaround in its business performance,” said Tata Steel.
Following this announcement, shares of TRF hit the 20% upper circuit on Wednesday as the previously agreed merger had an unfavourable swap ratio. At the time of the amalgamation announcement, TRF shareholders were to get 17 shares of Tata Steel for 10 shares of the company, which was a 53% discount.
Meanwhile, Tata Steel shares on Wednesday closed flat at Rs 144.35 apiece. For the three other companies - Bhubaneswar Power Private Limited, Angul Energy Limited and The Indian Steel and Wire Products Limited, the merger process is in advanced stages with the respective jurisdictional company law tribunals and is expected to be completed by Q1FY25, subject to regulatory approvals.