Mahindra Satyam Merges into Tech Mahindra

The Boards of Directors of Tech Mahindra Limited (“Tech Mahindra”) and Satyam Computer Services Limited, (“Mahindra Satyam”), in their respective meetings held today, approved a proposal to merge Mahindra Satyam with Tech Mahindra along with certain wholly owned subsidiaries of Mahindra Satyam and Tech Mahindra.

Key highlights of the merger

• The exchange ratio recommended by the valuers and approved by both the boards is 2 shares of Tech Mahindra (face value of Rs. 10 each), for every 17shares of Mahindra Satyam (face value of Rs. 2 each).
• On a pro-forma basis, the Mahindra Group will own 26.3% in the combined entity,British Telecom will own 12.8%, 10.4% will be held as treasury stock, 34.4% to be held by the public shareholders of Mahindra Satyam and the balance 16.1% will be held by the public shareholders of Tech Mahindra.
• Tech Mahindra will issue 10.34 crore new shares, thereby increasing its outstanding shares to 23.08 crore and its equity capital to Rs 230.8 crore

Merger benefits and synergies

• The merger will result in the creation of a new offshore services leader with revenues of approximately US$2.4bn in revenues, approximately 75,000+ strong work force and 350+ active clients (including Fortune Global 500 companies), across 54 countries.
• The joint entity will have a unified ,go-to-market strategy with deep competencies and a balanced mix of revenues from Telecom, Manufacturing, Technology, Media & Entertainment, Banking Financial Services and Insurance, Retail and Healthcare.
• Revenues will be well balanced with a diversified global footprint that would boast of contribution from Americas at 42%, Europe at 35% and Emerging Markets at 23%,
• The combined entity will leverage Tech Mahindra's expertise in Mobility, System Integration, and delivery of large transformations and to better penetrate the opportunity presented by Mahindra Satyam's diverse set of clients across multiple verticals.
• Likewise Mahindra Satyam's expertise in Enterprise Solutions will enable a more complete value proposition to be delivered to Tech Mahindra's clients.
• The combination will benefit from operational synergies, economies of scale, sourcing benefits, and standardization of business processes.

Commenting on the merger Mr. Anand G Mahindra, Chairman, Tech Mahindra said
“This 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”.