The Board of Directors of Tata Steel Limited at its meeting held on Thursday, considered and approved schemes for the proposed amalgamation of six subsidiaries into and with Tata Steel Limited. The subsidiaries are all majority owned by Tata Steel and include Tata Steel Long Products Limited (74.91% equity holding), The Tinplate Company of India Limited (74.96% equity holding), Tata Metaliks Limited (60.03% equity holding), The Indian Steel & Wire Products Limited (95.01% equity holding), 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 Board has considered the proposal based on independent fairness and valuation opinions, and followed the process laid down under the Companies Act, 2013 and Securities and Exchange Board of India Regulations.
Based on the reports of the independent valuers, the Board has approved swap ratios for the proposed amalgamations as below: For every 10 shares of Tata Steel Long Products Limited, 67 shares of Tata Steel Limited, for every 10 shares of The Tinplate Company of India Limited, 33 shares of Tata Steel Limited, for every 10 shares of Tata Metaliks Limited, 79 shares of Tata Steel Limited; and for every 10 shares of TRF Limited, 17 shares of 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. 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. 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).
Each scheme of amalgamation will now move into a defined regulatory approval process, which includes approval by stock exchanges and the NCLT.