New Delhi: Tech Mahindra on Tuesday announced the completion of merger of Satyam Computer Services with itself. The merger propped up the merged entity as the fifth largest Indian IT services provider.
The new combined entity will be called Tech Mahindra, dropping the name Satyam altogether. The headquarters of the new entity will be in Mumbai. The company got the approval from the registrar of companies for the merger late in the night on Monday. The Andhra Pradesh High Court had approved the merger on 11 June 2013.
“All the process and procedures required for amalgamation of Satyam with Tech Mahindra are complete. As I speak to you now, we are one company. Like any modern day couple, we have been living together for four years and yesterday (on Monday) at 11:45 (pm) the actual pheras took place and we are now fully merged family,” said Vineet Nayyar, vice-chairman, Tech Mahindra.
According to Sundararaman Vishwanathan, an analyst with Zinnov Management Consulting, the merger is the largest such deal in the Indian IT?sector.
Tech Mahindra purchased Satyam in a government-backed auction in 2009 after its founder Ramalinga Raju in one of the biggest corporate frauds, confessed to fudging the company’s accounts.
Anand Mahindra, the chairman of the Mahindra group, will be the chairman of the board and C.P. Gurnani will be the managing director and CEO of Tech Mahindra. Milind Kulkarni will be the CFO of the company.
The combined entity will have $2.7 billion in revenues and 84,000 employees. “There are certain advantages which come with size,” said Nayyar. He said that the company has plans, vision and a resurgent spirit to achieve it.
The company will start giving combined financial results from the next quarter. “We have already determined the date (July 5) on which the Satyam shares will be swapped for Tech Mahindra shares which was approved by both the boards,” said Nayyar.
Tech Mahindra and Mahindra Satyam boards had approved the merger in 2012. The exchange ratio for the merger was pegged at 2:17 ratio.
Gurnani said that there will be zero job loss due to the merger and added that by 2015, Tech Mahindra will be a $5 billion company.
The company envisages to run three distinct business units: telecom business unit, enterprise business unit and business solution/BPO business unit. The enterprise business unit will be headquartered in Hyderabad, telecom in Pune and BPO in Noida.
“There are no investigations per se pending other than investigations against the Raju family and managers who are indicted,” said Nayyar. He said that the great thing about Satyam was its technical capability and its long and biding relationships with the clients.
However, Nayyar said that because of certain goings on, “which was confined fortunately to a few people in the management of Satyam, the company was facing what was the near death experience.”
“We worked with Satyam managers, we worked most importantly with what we termed as the spirit of Satyam — the will to survive and the will to excel. As a result of this, after four years we find a company, which had been written off completely, back as a potent force in the technology scene,” he said.