TechM to merge two of its US-based subsidiaries to cut costs, manage risks

Tech Mahindra has unveiled plans to merge two of its wholly-owned subsidiaries, Born Group and Tech Mahindra (Americas). The objective behind this strategic move is reportedly to harmonise business operations, enhance cost efficiency and mitigate compliance risks, the company said in a regulatory filing with the Bombay Stock Exchange (BSE). The appointed date of merger is April 1, 2024.

“A plan of the merger of Born Group Inc, a wholly-owned step-down subsidiary of the company with its parent company — Tech Mahindra Americas (TMA), a wholly-owned material subsidiary of the company, has been approved by the respective companies on March 22,” the announcement said.

Born Group, incorporated in the US in 2011, specialises in providing brand strategy, visual design, brand identity exploration, and more for digital products, mobile apps, and physical products.

Tech Mahindra Americas (TMA) was started in the US in 1993 and provides computer consulting, programming support services, and IT management & consulting services.

In the financial year 2024, Born registered a turnover of $55.08 million, while TMA's turnover touched $1,201.37 million, according to the company, which added that the merger plan does not entail any exchange of cash or issuance of new shares.

“Both the transferor and transferee companies are wholly-owned subsidiaries and hence there will be no cash consideration or issue of new shares involved under the Plan of Merger. The investment of TMA in Born will get cancelled on the merger becoming effective,” the filing said.

The merger will not impact the shareholding pattern of Tech Mahindra, as it is not a part of the merger, it added.

Tech Mahindra and IBM have joined forces to inaugurate a Synergy Lounge in Singapore, aimed at accelerating digital adoption for enterprises across the Asia-Pacific region. This collaboration seeks to leverage next-gen technologies such as AI, intelligent automation, hybrid cloud, 5G, edge computing, and cybersecurity to drive innovation and offer unique solutions to various industries.

The company said that enterprises will be assisted in operationalising these technologies to solve complex business problems and enhance efficiency.