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Mahindra Satyam is merging with its parent entity Tech Mahindra, in a stock deal valued at about $1 billion.
The exchange ratio approved by both the boards is 2 shares of Tech Mahindra (face value of Rs. 10 each), for every 17 shares of Mahindra Satyam (face value of Rs. 2 each), according to the company press release.
AZB & Partners acted as sole legal advisor on this transaction. The team was led by Partner Abhijit Joshi along with Senior Associate Nandish Vyas.
The merger will create the fifth largest software services exporter by market cap and revenues, as well as headcount, behind TCS, Infosys, Wipro and HCL Technologies.
The merger will result in the creation of a new offshore services leader with revenues of approximately US$2.4bn in revenues, approximately 75,000+ strong work force and 350+ active clients (including Fortune Global 500 companies), across 54 countries.
On a pro-forma basis, the Mahindra Group will own 26.3 percent in the combined entity, British Telecom will own 12.8 percent, 10.4 percent will be held as treasury stock, 34.4 percent to be held by the public shareholders of Mahindra Satyam and the balance 16.1 percent will be held by the public shareholders of Tech Mahindra.
Satyam was sold in April 2009 to Tech Mahindra, a unit of Mahindra & Mahindra, after the founder of Satyam admitted to one of the largest accounting frauds in India and was later renamed as Mahindra Satyam.