Advertisement

  • News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
BW Businessworld

Tata's Metal Subsidiaries To Merge With Tata Steel

In line with Tata Steel’s long-term strategy, the alignment in the downstream operations will reflect growth in value-added segments by leveraging Tata Steel’s nationwide marketing and sales network, stated a statement from Tata Steel

Photo Credit : PTI

1645008836_Cg77Fq_tata.png

The board of directors of Tata Steel on Thursday approved the merger of seven of its metal subsidiaries into Tata Steel in order to drive synergies, simplify group holding and management structures, consolidate and strategically grow downstream operations and engineering capabilities. 

The seven metal companies, Tata Steel Long Products Limited, The Tinplate Company of India Limited, Tata Metaliks Limited, TRF Limited, The Indian Steel & Wire Products Limited, Tata Steel Mining Limited and S & T Mining Company Limited, will amalgamate with their parent metal company.

The schemes are subject to approval by an eligible majority of the shareholders of the respective transferor and transferee companies, the competent authority, the stock exchanges, SEBI, and any other regulatory, statutory, and governmental (quasi-judicial) approvals, permissions, and sanctions as required by applicable laws.

In line with Tata Steel’s long-term strategy, the alignment in the downstream operations will reflect growth in value-added segments by leveraging Tata Steel’s nationwide marketing and sales network, stated a statement from Tata Steel. 

"The merger will give impetus to drive synergies through raw material security, centralised procurement, optimisation of inventories, reduced logistics costs, and better facility utilisation," the statement added.

"This merger is a positive step as it will simplify the corporate structure and reduce corporate overheads. Moreover, It will plug leakage of addition royalty payments on inter-company iron ore transfers,  and it will enable various businesses with higher financial flexibility to progress on growth projects and bring in further operational, procurement and tax synergies," said Jatin Damania, Vice President - Fundamental Research, Kotak Securities.

Shares of Tata Steel ended 0.77 per cent higher on Friday at Rs 104.40 apiece on the BSE.


Tags assigned to this article:
tata steel mergers stocks