Tata Steel Ltd on Wednesday said that it has successfully merged five of its nine strategic businesses, in line with its long-term strategy and commitment to simplify its business portfolio. In an exchange filing on Wednesday, the company said the integration of the five businesses was underway after it completed the regulatory processes.
The five companies being integrated are Tata Steel Mining Ltd, Tata Steel Long Products Limited, S&T Mining Company Limited, The Tinplate Company of India Ltd, and Tata Metaliks Limited. The steel major said that the merger process of three companies, Bhubaneswar Power Pvt. Ltd., Angul Energy Ltd. and The Indian Steel and Wire Products Ltd. is in advanced stages.
In 2022, Tata Steel announced the merger of nine strategic businesses as part of its long-term strategy and commitment to simplify the business portfolio.
“The merger of five companies with a cumulative annual turnover of Rs 19,700 crore in FY23, in record time, presents a unique opportunity for consolidation of the downstream operations," the company said.
It added that Tata Steel Mining (turnover: Rs 5,000 crore in FY23), was merged in September 2023, while Tata Steel Long Products (turnover: Rs 7,464 crore in FY23), was merged in November 2023. S&T was merged in December 2023, while the merger of The Tinplate Company (turnover: Rs 3,983 crore in FY23), took place in January 2024, and that of Metaliks Limited (turnover: Rs 3,260 crore) took effect on February 1, 2024.
“This will enable growth in value-added segments by leveraging Tata Steel’s nationwide marketing and sales network. The amalgamation is value-accretive and will also drive synergies through raw material security, centralised procurement, optimisation of inventories, reduced logistics costs, and better facility utilisation," Tata Steel said.
Bhubaneswar Power is a wholly-owned subsidiary of Tata Steel. The steel company holds 99.99% of stake in Angul Energy and 98.15% in The Indian Steel and Wire Products.
The company has also called off its proposed merger with its associate company TRF after an improvement in TRF’s operations and business performance. Tata Steel owns 34 per cent of shares in TRF Ltd and termed as an associate company.
It said: “In the case of TRF Ltd, the Boards of both the companies have decided not to pursue the amalgamation process,” said Tata Steel in a statement. Tata Steel said that it had been providing operational and financial support to TRF by placing orders and infusing funds after announcing a merger in September 2022. “With the active support from Tata Steel, TRF has successfully navigated a highly challenging operating environment, witnessing a turnaround in its business performance,” Tata Steel said in a statement.
Following the news, TRF’s shares rose 19.99 per cent after the withdrawal of the merger. In its exchange filing, TRF said that the merger scheme was called off owing to improvements in its business performance over the last few quarters with "sufficient support" being extended by Tata Steel.
TRF has seen improvement in business performance owing to ongoing significant support from Tata Steel in the form of placement of order(s) and infusion of capital coupled with company’s efforts on enhanced debtor collections, cost and asset optimisation, it said in a filing.
Established in November 1962, TRF is part of the Tata Group with headquarters in Jamshedpur. TRF houses an advanced manufacturing facility complemented by an innovative design and engineering team. The company is promoted by Tata Steel and ACC Limited.
Shares of Tata Steel hit a 52-week high of Rs 147.35, up 2 per cent on BSE in intra-day trade today. The shares closed at Rs 144.35, down by 0.24 per cent.
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