Tech Mahindra to merge with Mahindra Satyam

Tech Mahindra to merge with Mahindra SatyamThe board of the Tech Mahindra has given its approval to the merger of the company with Mahindra Satyam, a move that will result in the creation of the fifth largest software services exporter in terms of market value.

The revenues of the combined entity will be about $2.4 billion and it will have more than 350 clients in different locations and in different locations, according to a statement from Tech Mahindra on Wednesday.

The shareholders of Mahindra Satyam will receive one share of Tech Mahindra for 8.5 shares of Satyam held, it announced. According to experts, a swap ratio of 2:17 for the proposed merger is mostly as per the expectations of the market.

The new company will have the capability to bid for larger projects in the domestic as well as international markets. Experts say that about 204,000,000 shares of Mahindra Satyam will be transferred to a trust in which Tech Mahindra will be the beneficiary.

Tech Mahindra acquired Mahindra Satyam in April 2009 following the country's biggest corporate scandal involving following founder B. Ramalinga Raju.

Mahindra Satyam had recorded an increase of 29.4 per cent in its consolidated net profit to Rs 308 crore in the quarter till December 2011.