New Delhi: IT services firm Tech Mahindra on Tuesday announced completion of Mahindra Satyam's merger with itself to create nation's fifth largest software services company with a turnover of USD 2.7 billion.
The merged entity will be called Tech Mahindra which will aim to almost double the turnover to USD 5 billion by 2015 with focus on telecom, manufacturing, BFSI among others. Anand Mahindra will be the chairman of the combined entity.
Today we have fulfilled the commitment made in 2009, when we acquired Satyam, to jointly become one-of-the largest, diversified players leveraging technology for business solutions, Mahindra said in a statement.
"Over the past 4 years we worked through the statutory and legal issues, our teams worked closely on the ground to integrate processes, eliminate overlaps, leverage best practices and deliver enhanced value to all our shareholders," Tech Mahindra Executive Vice Chairman Vineet Nayyar said at a press conference here.
The USD 16.2 billion Mahindra Group had in 2009 taken over Satyam Computers after a multi-billion dollar scam by its founding chairman B Ramalinga Raju was unearthed.
Boards of Tech Mahindra and Mahindra Satyam approved the merger on March 21, 2012. After an approval from the Mumbai High Court, the merger had been awaiting clearances from Andhra Pradesh High Court, which gave nod on June 11, 2013.
Nayyar announced that Milind Kulkarni will be the CFO of the combined entity.
On the path ahead, Tech Mahindra Managing Director CP Gurnani said: "We will continue to focus on telecom and manufacturing. And we strongly believe that by 2015 we will be a USD 5 billion company."
On being asked about Andhra Pradesh High Court's order to continue investigations into the alleged fraud by B Ramalinga Raju, Nayyar said: "There is no investigation pending against the company. We will fully cooperate on the continuing investigation."
On share swap, Gurnani said the swap will take place on July 5 in the ratio of 8.5 shares of Satyam for every share of Tech Mahindra held.
The combined firm, which will have its headquarters in Mumbai, now has an employee strength of 84,000 serving 540 clients across 46 nations. It has 11 locations in India and 15 overseas for BPO operations and software development.
On combined entity's investment plan, Tech Mahindra Chief Marketing Officer and Global Head (Business Consulting) T Hari said it has been investing in platforms to make it more competitive.
On acquisitions, he said: "We can go for acquisition this year too, but it should enhance our competitiveness and services potential and at the same time create a niche service portfolio." It has cash & cash equivalent of USD 650 million.
On developing more delivery centres, Hari said the company is already expanding centres in Vizag, Bhubneswar and Chandigarh. It is also looking at developing centres in tier-II cities. Shares of both Tech Mahindra and Mahindra Satyam closed 1 percent higher on the BSE.