Tech Mahindra Announces Merger of Subsidiaries

Tech Mahindra Limited has announced the approval of a merger between its two wholly-owned subsidiaries, Tech Mahindra Cerium Systems Inc. (TMCS) and Tech Mahindra (Americas) Inc. (TMA).

Details of the Merger

The Board of Directors of both companies approved the Plan of Merger on February 17, 2025. The merger is subject to regulatory approvals in the country of incorporation, with the appointed merger date set for February 20, 2025. This strategic move is expected to streamline operations and enhance efficiency within the organisation.

Tech Mahindra Cerium Systems Inc. (TMCS) was incorporated in the USA in 2014 and is engaged in providing design services in the semiconductor industry, along with embedded software services. However, TMCS is currently a non-operating entity. For the financial year ending March 31, 2024, it reported a turnover of USD 2.7 million.

Meanwhile, Tech Mahindra (Americas) Inc. (TMA) was established in 1993 and offers IT consulting, programming support, and IT management services to various industries, including healthcare. TMA recorded a significantly higher turnover of USD 1,153.28 million for the same financial year.

Objective of the Merger

The primary objective of this merger is to consolidate entities within Tech Mahindra’s corporate structure, leading to reduced operational costs and minimised compliance risks. By merging TMCS into TMA, the company aims to optimise efficiency while eliminating the administrative overhead associated with maintaining multiple subsidiaries. This strategic restructuring will enhance Tech Mahindra’s ability to focus on core business areas and drive sustainable growth.

Since both TMCS and TMA are wholly-owned subsidiaries, the merger will not involve any cash transactions or the issuance of new shares. Instead, the investment of Tech Mahindra in TMCS will be cancelled upon the completion of the merger. This transaction falls under Regulation 23(5)(c) of SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, making it exempt from certain regulatory approvals.

On February 18, 2025, Tech Mahindra share price (NSE: TECHM) opened at ₹1,668.00, touching the day’s high at ₹1,693.00, as of 11:17 AM on the NSE.

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