Tech Mahindra, Satyam merge; become 5th biggest IT firm

Tech Mahindra completed the merger of its unit Satyam Computer Services with itself, making it the No. 5 Indian IT services provider. The combined company will be called Tech Mahindra, according to a company statement on Tuesday.

The combined entity will now have employee strength of 84,000 and revenues totalling $2.7 billion.

Tech Mahindra managing director CP Gurnani expects the combined entity to clock revenues of $5 billion by 2015.

The company will cater to 540 clients across 46 countries. In India, the merged entity will operate out of 11 locations. It will have 15 overseas offices for BPO (business process outsourcing) operations and software development.

Pune-based Tech Mahindra owns close to 43 per cent of Satyam. It is offering one share in itself for every 8.5 shares of Satyam to absorb the company. A date for recording the exchange is yet to be set.

Part of the $16 billion Mahindra group, Tech Mahindra purchased Satyam in a government-backed auction in 2009 after the founder of the Hyderabad-based company admitted to one of India's biggest accounting frauds.
     
The two companies had passed a merger proposal on March 21, 2012 followed by an approval from the Mumbai High Court. The Andhra Pradesh High Court paved the way for the merger on June 11, 2013.

Tech Mahindra executive vice chairman Vineet Nayyar said Milind Kulkarni will be the chief financial officer (CFO) of the combined entity.

Shares in both the companies traded with over 1 per cent gains. While Satyam rose 1 per cent to Rs 115.90, Tech Mahindra advanced 1.1 per cent to Rs 1,010.20 as of 12.47 p.m.

(With inputs from agencies)