Tata Steel board approves merger of six subsidiary companies
The Board of Directors of Tata Steel Limited at its meeting held on September 22 considered and approved schemes for the proposed amalgamation of six subsidiaries into and with Tata Steel Limited.
The subsidiaries are Tata Steel Long Products Limited in which Tata Steel holds 74.91% equity, The Tinplate Company of India Limited (74.96%), Tata Metaliks Limited (60.03%), The Indian Steel & Wire Products Limited (95.01%), Tata Steel Mining Limited and S&T Mining Company Limited (both wholly-owned subsidiaries). The Board also approved the amalgamation of TRF Limited (34.11% equity holding) into Tata Steel Limited.
“The proposed amalgamations will enhance management efficiency, drive sharper strategic focus and improve agility across businesses based on the strong parental support from Tata Steel leadership,” a statement issued by Tata Steel said.
It adds, “In line with Tata Steel’s long-term strategy, the consolidation of the downstream operations will enable growth in value added segments by leveraging Tata Steel’s nationwide marketing and sales network. The amalgamations will also drive synergies through raw material security, centralized procurement, optimization of inventories, reduced logistics costs, and better facility utilization. On completion, there will be further opportunities towards reduction of overhead and corporate costs. Each of the proposed amalgamations will be value-accretive for shareholders.”
The Boards of all the amalgamating companies have also considered the proposals following due process and have unanimously approved the amalgamations. The proposed amalgamation is also part of Tata Steel’s continuing journey to simplify the group holding structure, the statement adds.
According to the statement, since 2019, Tata Steel has reduced 116 associated entities (72 subsidiaries have ceased to exist, 20 Associates and JVs have been eliminated and 24 companies are currently under liquidation).