HC clears merger of Mahindra Satyam with Tech Mahindra

The Andhra Pradesh high court today gave its nod for the merger of Mahindra Satyam and Tech Mahindra. The court's decision paves way for the creation of the fifth largest IT company in India, following TCS, Infosys, Wipro and HCL Tech.

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It is a great relief for Mahindra Satyam. It has been long pending – for more than a year because a bunch of unsecured lenders have challenged the amalgamation process in Andhra Pradesh High Court. They have been asking the Andhra Pradesh High Court to settle the issue of Rs 1250 crore receivables from Mahindra Satyam before the merger process is initiated, reports CNBC-TV18’s Appaji Reddem.

Now the merger process can be initiated because the last hurdle of Andhra Pradesh High Court's approval has been given.

There are several other entities like Competition Commission of India (CCI), Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and Bombay High Court, which have already given approval for the merger. Now with the Andhra Pradesh High Court's approval the company can initiate the merger process.

The combined entity of both Mahindra Satyam and Tech Mahindra can emerge as a robust USD 2.4 billion company. It can negotiate with other companies abroad and can get better offers as per sources.

There will be greater cooperation and coordination between departments.

Sources also say that there are some restrictions and conditions put forth by the Andhra Pradesh High Court on the merger and the details of which are not yet known. That is because the court order is yet to come out, it is expected anytime on Tuesday evening.