The Board of Directors of the Tata Steel (“Board”) at its meeting held today i.e. September 22, 2022, inter alia, considered and approved the following Seven Schemes of Amalgamation.
- Tata Steel Long Products Limited (‘TSLP-Transferor Company’) into and with its parent company, Tata Steel Limited (‘Transferee Company’).
- The Tinplate Company of India Limited (‘TCIL-Transferor Company’) into and with its parent company, Tata Steel Limited (‘Transferee Company’).
- Tata Metaliks Limited (‘TML-Transferor Company’) into and with its parent company, Tata Steel Limited (‘Transferee Company’).
- TRF Limited (‘TRF-Transferor Company’) into and with Tata Steel Limited (‘Transferee Company’).
- The Indian Steel & Wire Products Limited (‘ISWP-Transferor Company’) into and with its parent company, Tata Steel Limited (‘Transferee Company’).
- Tata Steel Mining Limited (‘TSML-Transferor Company’) into and with its parent company, Tata Steel Limited (‘Transferee Company’); and
- S & T Mining Company Limited (‘S & T Mining-Transferor Company’) into and with its parent company, Tata Steel Limited (‘Transferee Company’)
The amalgamation will ensure creation of a combined entity, hosting value-added steel products under the Transferee Company, leading to ‘One-Tata Steel’ in front of customers which will improve shareholder value of the merged entity. Further, such restructuring will lead to simplification of group structure by eliminating multiple companies in similar business.
The companies believe that the financial, managerial and technical resources, personnel, capabilities, skills, expertise and technologies of the companies pooled in the merged entity, will lead to optimum use of infrastructure, cost reduction and efficiencies, productivity gains and logistic advantages and reduction of administrative and operational costs and thereby maximising shareholder value of the merged entity.
The proposed amalgamation would result in synergy benefits arising out of single value chain thereby reducing costs and increasing operational efficiencies. Centralization of inventory primarily stores, spares, MRO, and services can be managed centrally which will increase scale of operations thereby improving negotiating power, reducing sourcing and inventory management costs. The amalgamation is expected to result in better alignment, optimized power consumption, sharing of best practices, cross-functional learnings, better utilisation of common facilities and greater efficiency in debt and cash management.
In line with group level 5S strategy – simplification, synergy, scale, sustainability, and speed – the amalgamation will simplify group holding structure, improve agility to enable quicker decision making, eliminate administrative duplications, consequently reducing administrative costs of maintaining separate entities.
Sales and distribution network will be pooled, providing greater market penetration. The culture of customer delight will be fostered by transitioning to the culture of ‘one-face’ to customers thereby making it easier to address customer needs by providing them uniform product and service experience, resolving customer complaints, ensuring on-time deliveries, and improved service quality. With common credit management, customers are expected to benefit from the channel financing facility.
Adoption of improved safety, environment and sustainability practices owing to a centralized committee at combined level to provide focused approach towards safety, environment and sustainability practices resulting in overall improvement. Further, overall technology maturity can be enhanced by the companies through unfettered access to each other’s information technology applications and systems.
Each Scheme is subject to the receipt of approval from the (a) requisite majority of the shareholders of the respective Transferor Companies and Transferee Company; (b) Competent Authority (as defined in each of the Schemes), (c) SEBI (d) The National Stock Exchange of India Limited and the BSE Limited and (e) such other approvals, permissions and sanctions of regulatory and other statutory or governmental authorities / quasi-judicial authorities, as may be necessary as per applicable laws.