Strategic Push: Tata Steel To Merge With Itself Seven Group Companies

Tata Steel will merge with itself seven group metal companies, a regulatory filing from the Tata Steel said today (23 September). 

The board of directors of the company at its meeting held on Thursday approved the scheme of amalgamation.

Among the seven companies, six are the subsidiary companies of Tata Steel and one is an associate company.

The six subsidiaries are majority owned by Tata Steel and include Tata Steel Long Products Ltd (74.91 per cent equity holding), The Tinplate Company of India Ltd (74.96 per cent equity holding), Tata Metaliks Ltd (60.03 per cent equity holding), The Indian Steel & Wire Products Ltd (95.01 per cent equity holding), Tata Steel Mining Ltd and S & T Mining Company Ltd (both wholly owned subsidiaries). 

The board also approved the amalgamation of TRF Ltd (34.11 per cent equity holding), an associate company into Tata Steel Ltd.

“The proposed amalgamations will enhance management efficiency, drive sharper strategic focus and improve agility across businesses based on the strong parental support from Tata Steel leadership,” the Tata Steel statement said.

“In line with Tata Steel’s long-term strategy, the consolidation of the downstream operations will enable growth in value added segments by leveraging Tata Steel’s nationwide marketing and sales network,” the statement said.

On completion, there will be further opportunities towards reduction of overhead and corporate costs. Each of the proposed amalgamations will be value-accretive for shareholders, Tata Steel said.

The company has withdrawn the earlier merger scheme of Tata Metaliks and Tata Steel Long Products (TSPL).

The proposed amalgamation is also part of Tata Steel’s continuing journey to simplify the group holding structure.

Since 2019 Tata Steel has reduced 116 associated entities (72 subsidiaries have ceased to exist, 20 associates and joint ventures have been eliminated and 24 companies are currently under liquidation).

Tata Steel group is among the top global steel companies with an annual crude steel capacity of 34 million tonnes per annum.

It is one of the world's most geographically diversified steel producers, with operations and commercial presence across the world.

The group recorded a consolidated turnover of $32.83 billion in the financial year ending 31 March 2022.