Tata Steel has announced successful amalgamation with 5 businesses today. The company has also called off its proposed merger with its associate company TRF after an improvement in TRF’s operations and business performance.
“In the case of TRF Ltd, the Boards of both the companies have decided not to pursue the amalgamation process,” said Tata Steel in a statement. Tata Steel said that it had been providing operational and financial support to TRF by placing orders and infusing funds after announcing a merger in September 2022. “With the active support from Tata Steel, TRF has successfully navigated a highly challenging operating environment, witnessing a turnaround in its business performance,” Tata Steel said in a statement. TRF Ltd, which is 34 per cent owned by Tata Steel, is termed as an associate company.
TRF’s shares rose 19.99 per cent after the withdrawal of the merger.
In a bid to drive efficiency and cut operational costs, Tata Steel announced in September last year to merge several of its subsidiaries with itself.
Meanwhile, Tata Steel has successfully amalgamated with five other businesses and awaits integration. These companies include: Tata Steel Mining Limited with an annual turnover of ₹5,000 crore in FY23, merged effective September 1, 2023; Tata Steel Long Products Limited with an annual turnover of ₹7,464 crore in FY23, merged effective November 15, 2023, S&T Mining Company Limited merged effective December 1, 2023; The Tinplate Company of India Limited with an annual turnover of ₹3,983 cr in FY23, merged effective January 15, 2024; and Tata Metaliks Limited with an annual turnover of ₹3,260 cr in FY23, merged effective February 1, 2024.
“The merger of five companies with a cumulative annual turnover of ~₹19,700 cr in FY23, in record time, presents a unique opportunity for consolidation of the downstream operations. This will enable growth in value added segments by leveraging Tata Steel’s nationwide marketing and sales network. The amalgamation is value-accretive and will also drive synergies through raw material security, centralised procurement, optimisation of inventories, reduced logistics costs, and better facility utilisation,” Tata Steel said.
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For the three other companies - Bhubaneswar Power Private Limited (wholly owned subsidiary of Tata Steel), Angul Energy Limited (Tata Steel shareholding - 99.99 per cent), and The Indian Steel and Wire Products Limited (Tata Steel shareholding - 98.15 per cent), the merger process is in advanced stages with the respective jurisdictional company law tribunals and is expected to be completed by Q1FY25, subject to regulatory approvals.