Vineet Nayyar the chairman of Mahindra Satyam is confident of completing the merger of Mumbai based Tech Mahindra with Hyderabad based Mahindra Satyam in eight weeks following a final approval from the Andhra Pradesh High Court.
The merger had been pending for more than a year now as bunch unsecured lenders had challenged the two IT company’s amalgamation process in Andhra Pradesh High Court, demanding settlement of Rs 1250 crore receivables from Mahindra Satyam before the merger.
The merger will make way for the creation of the fifth largest IT company in India, following TCS , Infosys , Wipro and HCL Tech and will also help the company to get bigger outsourcing orders.
“We will be able to use our capabilities in telecom in the enterprise space which are the clients of Satyam and similarly the capabilities of Satyam in the telecom space which has been the space of Tech Mahindra,” Nayyar said.
Below is the verbatim transcript of the interview.
Q: Take us through the Andhra Pradesh High Court verdict? The merger has been approved with some conditions. What are these conditions?
A: The merger has been approved with not many conditions. The only condition which they have stated is that we continue to cooperate with the government or investigation agencies when they are investigating into Ramalinga Raju's misdemeanors and that we have been doing all the time in any case.
Q: What is the timeline you are looking at? You are fairly confident that the Andhra Pradesh High Court will give its approval. What is the process now? What is the timeline that you are looking at to finally consolidate the two balance sheets?
A: I think we will now go to Registrar of Companies (RoC) of Andhra Pradesh and Maharashtra to state that all processes and procedures relating to merger are complete. Once that happens RoC Andhra Pradesh will strike up the name of Satyam and the Maharashtra RoC subsequently will accept that work which was being done will now be with Tech Mahindra and the two companies will be deemed to have been merged.
Q: What is the timeline that you are looking at, is it around five to six months or earlier?
A: I think it should take about eight weeks.
Q: In terms of the kind of synergies – over the last two years the companies have been consolidating in terms of go to market strategy, in terms of management strategy, what are the synergies that are left now considering the approval has come in? What are the changes that we can expect in the company?
A: Besides some marginal synergies in terms of certain number of people getting reduced and being redeployed elsewhere, I think the greatest synergy which will now come is in relation to the customer who will see us as one company rather than two groups. We will be able to use our capabilities in telecom in the enterprise space which are the clients of Satyam and similarly the capabilities of Satyam in the telecom space which has been the space of Tech Mahindra.
Q: Just to clarify there would be a reduction in employees as well?
A: No, we expect no reduction in employees. In fact because of growth we would expect a certain amount of increase in the number of employees.
Q: The investors are looking at getting some clarity on what the new name will be, how the new management structure will be? CP Gurnani will be the CEO, you are still on board what is the new branding strategy now?
A: Watch this space, you will find out.
Q: We haven’t seen the order copy yet so just a quick word on what was the Andhra Pradesh High Courts verdict on the minority shareholder case because haven’t gotten the order yet?
A: All issues raised at various levels have been dismissed.
Q: And this also includes the shareholders issue with respect to the swap ratio as well?
A: I presume so.