Tata Steel plans to consolidate 7 group companies to simplify holding structure


New Delhi: In an effort to consolidate the metals and mining industry and streamline the holding structure, Tata Steel’s board of directors has approved the merger of six subsidiaries and one related company.

Thursday’s ruling would affect listed companies Tata Steel Long Products, The Tinplate Company of India Limited, Tata Metaliks and TRF, according to a press release.

Tata Steel is the majority owner of Tata Steel Long Products, The Tinplate Company, Tata Metaliks, The Indian Steel & Wire Products, Tata Steel Mining and S&T Mining. The board also gave the green light to the merger of Tata Steel with an associated company, TRF (34.11 shareholding).

According to a statement by Tata Steel, the merger will improve management effectiveness, promote greater strategic alignment and increase the company’s agility. Tata Steel’s extensive national marketing and sales network would be leveraged to leverage the convergence of downstream operations to facilitate expansion into value-added categories.

“The move would also promote synergies through raw material security, centralized sourcing, inventory optimization, reduced logistics costs and better facility utilization. Upon completion, there would be further opportunities to reduce overhead and corporate costs. Any of the proposed mergers will be value-added to shareholders,” the statement said.

The merger is a continuation of Tata Steel’s efforts to streamline the organization’s holding structure. Tata Steel has dissolved 116 affiliated organizations since 2019. (72 subsidiaries have been dissolved, 20 associates and joint ventures have been eliminated and 24 companies are in liquidation).

Based on impartial and valuation opinions, the board considered the proposal. According to Tata Steel, it followed procedures set out in the Companies Act 2013 and the regulations of the Securities and Exchange Board of India.

All of the combining companies and Tata Steel’s board of directors have approved the proposed merger. The previous plan to merge Tata Metaliks with Tata Steel Long Products was abandoned.

There were also changes in the management of the Group companies.

Tata Metaliks stated in an exchange report that Managing Director Sandeep Kumar has expressed his desire to leave the company at the end of operations on October 31, 2022 to take up a comparable position within the Tata Steel Group. On November 1, 2022, Alok Krishna would take over as CEO.

According to Tata Steel, any merger plan would now go through a specific regulatory approval process.

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