New Delhi: In an effort to consolidate the metals and mining industry and streamline the holding structure, the board of Tata Steel has authorised the merger of six subsidiaries and an associate firm with it.

According to a press release, the judgement on Thursday would affect the publicly traded firms Tata Steel Long Products, The Tinplate Company of India Limited, Tata Metaliks, and TRF.

Tata Steel is the majority owner of Tata Steel Long Products, The Tinplate Company, Tata Metaliks, The Indian Steel & Wire Products, Tata Steel Mining, and S&T Mining. The board also gave the go-ahead for Tata Steel to merge with an affiliated firm, TRF (34.11 equity stake).

According to a statement from Tata Steel, the combination will improve management effectiveness, foster a stronger strategic focus, and increase company agility. Tata Steel’s extensive national marketing and sales network would be used to leverage the convergence of downstream operations to facilitate expansion in value-added categories.

“The move would also drive synergies through raw material security, centralized procurement, optimization of inventories, reduced logistics costs, and better facility utilization. On completion, there would be further opportunities towards reduction of overhead and corporate costs. Each of the proposed amalgamations will be value-accretive for shareholders,” said the statement.

The merger is a continuation of Tata Steel’s efforts to streamline the organization’s holding structure. Tata Steel has cut 116 related organisations since 2019. (72 subsidiaries have ceased to exist, 20 associates and joint ventures have been eliminated and 24 companies are under liquidation).

On the basis of impartial and valuation opinions, the board thought about the proposition. According to Tata Steel, it adhered to the procedures outlined in the Companies Act of 2013 and the Securities and Exchange Board of India Regulations.

All of the combining firms and the board of Tata Steel approved the proposed merger. The previous plan to combine Tata Metaliks with Tata Steel Long Products has been abandoned.

The leadership of the group companies also underwent changes.

Tata Metaliks stated in an exchange filing that managing director Sandeep Kumar has indicated his desire to leave the company as of the end of operations on October 31, 2022, in order to accept a comparable position within the Tata Steel Group. On November 1, 2022, Alok Krishna would take over as managing director.

According to Tata Steel, each merger plan would now proceed via a specific regulatory approval procedure.