Satyam merges with Tech Mahindra to create $2.4 b co

Satyam merges with Tech Mahindra to create $2.4 b co

Tech Mahindra, on Wednesday, announced its long-awaited buyout of Mahindra Satyam (formerly Satyam Computer Services) at a swap ratio of 2:17 and the combined entity is to have a revenue of $2.4 billion and more than 350 clients across different geographies and industrial sectors.

Shareholders will get one share of Tech Mahindra for 8.5 shares of Satyam, the companies said. After merger, 204 million equity shares of Rs 2 each will be transferred to a trust of which Tech Mahindra will be the beneficiary.

Briefing reporters, Tech Mahindra Chairman Anand Mahindra said the merger will help propel the combined entity into the top tier of Indian software and services companies, achieving the group’s key objective of being in a leadership role in each of our focus business areas.

Vice Chairman & Managing Director and Mahindra Satyam Chairman Vineet Nayyar said the merger is a key part of our strategy to deliver industry leading performance.

Besides Satyam, four other wholly-owned Mahindra subsidiaries — Venturbay Consultants, C & S System Technologies, CanvasM Technologies and Mahindra Logisoft Business Solutions — will be considered for full integration.

Although the merged entity is yet to get a new name, it will be headquartered in Mumbai with CP Gurnani -- who has been credited largely for Satyam's profitability post the takeover by Tech Mahindra — and is also the current whole-time Director and CEO of Mahindra Satyam, as the Chief Executive Officer.

Nayyar, who mentored top leadership through transition as Chairman, will assume a non-executive role once the company stabilizes, absolving himself of overlooking the day to day operations of the company, while Sanjay Anand, a Tech Mahindra strong hand will be chief financial officer.

The management structure for the merged entity is yet to be finalised, all the same it expects no redundancies in staff post merger.

Employees will be permitted to shift across verticals and services after a minimum service period of 18 to 24 months. There will be some changes. As far as sales and delivery are concerned there is zero overlap so in that segment there will be no change. But in areas like HR, legal, Finance and resource management there will be some structural alignment,” said Gurnani.