Tatas to fold seven metal companies into Tata Steel
MUMBAI: The Tata Group is bringing the domestic steel business housed with seven different companies under one roof. The conglomerate will merge four listed companies and three unlisted entities with flagship Tata Steel in a move to streamline corporate structure and consolidate operations in similar lines of businesses.
The four listed companies are Tata Steel Long Products (in which Tata Steel holds about 75%), Tinplate Company of India (where Tata Steel owns nearly 75%), Tata Metaliks (60%) and TRF (34%). Whereas the three unlisted entities are The Indian Steel & Wire Products (in which Tata Steel has 95% interest), Tata Steel Mining (100%) and S & T Mining (100%).
In consideration for the merger, Tata Steel will issue 67 shares to Tata Steel Long Products’s public shareholders for every 10 shares held by them. It will also allot 33 shares to Tinplate’s public shareholders for every 10 shares owned by them. Likewise, Tata Steel will issue 79 shares to Tata Metaliks’ non-promoter shareholders for every 10 shares held by them. Additionally, it will issue 17 shares to TRF’s public shareholders for every 10 shares held by them.
After the share allocation, public shareholding in Tata Steel will go up slightly from the current level of 66%. Once the mergers are completed, Tata Steel will be the only entity from the Tata Group’s metal vertical to remain listed on the stock exchanges.
The Tata Group earlier announced plans to combine Tata Metaliks with Tata Long Products. This proposal, however, has been withdrawn with the conglomerate now deciding to merge Tata Long Products and Tata Metaliks with Tata Steel. Following the proposed changes, Tata Metaliks MD Sandeep Kumar and TRF MD Alok Krishna will step down from their positions. Both will take up new assignments within Tata Steel.
Since 2019, Tata Steel has reduced 116 entities (72 subsidiaries have ceased to exist, 20 associates and joint ventures have been eliminated and 24 companies are currently under liquidation) within its corporate structure. This has helped the company to reduce costs.
The Tata Group has previously transferred the salt and branded lentils business from Tata Chemicals to Tata Consumer, clubbed the defence and aerospace business under a single umbrella and has announced the merger of Tata Coffee with Tata Consumer.