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Tata Steel to merge 7 group companies, simplify holding structure

The board of directors of Tata Steel has approved the merger of six subsidiaries and one associate, with the aim of consolidating the metals and mining activities and simplifying the holding company structure.

The decision on Thursday is for listed companies Tata Steel Long Products, The Tinplate Company of India Limited, Tata Metaliks and TRF, a press statement said.

Tata Steel Long Products, The Tinplate Company, Tata Metaliks, The Indian Steel & Wire Products, Tata Steel Mining, S&T Mining are largely owned by Tata Steel. The board of directors also approved the merger of TRF (34.11 equity holding), an associate, into Tata Steel.

A statement from Tata Steel said the consolidation would improve management efficiency, drive a sharper strategic focus and improve business agility. The consolidation of downstream businesses would enable growth in value-added segments by leveraging Tata Steel’s nationwide marketing and sales network.

“The move would also drive synergies through resource security, centralized sourcing, inventory optimization, reduced logistics costs and better facility utilization. Upon completion, there would be further opportunities to reduce overhead and operating costs. Any of the proposed mergers will be value-enhancing for shareholders,” the statement said.

The consolidation continues Tata Steel’s aim to simplify the group holding structure. Since 2019, Tata Steel has reduced 116 associates (72 subsidiaries have ceased to exist, 20 associates and joint ventures have been eliminated and 24 companies are in liquidation).

The board has assessed the proposal on the basis of independent and valuation advice. It followed the process enshrined in the Companies Act, 2013 and the Securities and Exchange Board of India Regulations, Tata Steel said.

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The proposed merger was approved by the board of Tata Steel and all the merging companies. The previous merger of Tata Metaliks into and with Tata Steel Long Products has been withdrawn.

There were also changes in the management of group companies.

In an exchange request, Tata Metaliks said Sandeep Kumar, the company’s general manager, had expressed his intention to step down from the company’s services from the end of its business hours of October 31, 2022, in order to seize a similar opportunity within the Tata Steel group. And Alok Krishna would take over as general manager effective November 1, 2022.

Any merger plan would now move into a defined regulatory approval process, Tata Steel said.

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