MES and Tech Mahindra merger approved by Board

Board of Directors of Tech Mahindra Limited and Mahindra Engineering Services Limited (MES) have approved a proposal to merge MES with Tech Mahindra.

Karthikeyan Natarajan, Global Head - Integrated Engineering Services, Tech Mahindra, said,"MES and Tech Mahindra's Integrated Engineering Services (IES) merger strengthens the existing services portfolio, enhances presence in US and Germany, provides scale and brings in new clients for further expansion. Our Innovation and Product development expertise synergizing with the MES domain expertise enables the most comprehensive solution portfolio for our customers and the world at large"

Added Prashant Kamat, CEO, Mahindra Engineering Services Limited, "This merger is a big leap for us towards addressing growing business demands.  Our joint go-to-market strategy will help us capture newer markets and enhance our service portfolio especially in Aerospace and Embedded services segments while bringing value to all our stakeholders".

This merger, subject to necessary regulatory approvals, will see the creation of one of the prominent players providing engineering services from India with strengths in Aerospace and Automotive verticals.  MES will benefit due to the larger global reach and deeper resource pool of Tech Mahindra, while Tech Mahindra will gain access to some of the key automotive clients across the globe.
 
Key highlights
-  The exchange ratio recommended by the valuers and approved by both the boards is 5 shares of Tech Mahindra (face value of Rs. 10 each), for every 12 shares of Mahindra Engineering Services Limited (face value of Rs.10 each)
-  Tech Mahindra will issue 0.426 crore new shares, thereby increasing its outstanding shares to 23.73 crore
 - The merger is subject to all regulatory authority approvals and the entire process could take approximately 8-9 months, however given the regulatory process involved it is difficult to predict the exact timeframe