Tech Mahindra, Satyam all set to merger, swap ratio 2:17

The merging decision of Tech Mahindra with Mahindra Satyam raises their source of revenue as around $2.4 billion along with massive scope of 350 clients across different industrial sectors, announced by Tech Mahindra on Wednesday.

As per swap ratio, for every 2 shares of Tech Mahindra, Mahindra Satyam investors will give its 17 shares.

Merger deal will base on 8.5: 1 swap ratio; every shareholder will get one share of Tech Mahindra for 8.5 shares of Satyam. It identifies a positive effect for Tech Mahindra at current prices, but negative for Mahindra’s shareholders.

Market analyst reportedly said, “As per the terms decided for amalgamation, 204,000,000 shares of Mahindra Satyam will be transferred to a trust, in which Tech Mahindra will be the beneficiary.”

Interestingly, in April 2009, Tech Mahindra which is a unit of Mahindra & Mahindra took over Satyam and restructured as Mahindra Satyam.

By this “merge transaction” both companies will jointly make a combined entity as the fifth largest software services in terms of Market Cap.

Strengthening the larger size deals diversifying revenues, the combined entity will help to be strong the financial position of duo firms getting bigger business, bigger projects and bigger clients in comparison to alone. With firmly a new management structure, they will enlist in the largest IT companies with Infosys, Wipro and TCS.

However after the company announced its beneficiary merging decision with Mahindra Satyam, the Tech trading of stock went to 2.9% higher while Mahindra Satyam traded 1.2% higher.

All in all, there are only money fruits for all the parties that Mahindra group set their IT segments in one house under one roof. If all will work coordinately and systematically linking with their future business transactions, then Tech Mahindra and Mahindra Satyam merger is likely to be a golden egg as a huge scope of profits for Mahindra.


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