Tata Consultancy Services Ltd has won shareholder approval for its ongoing merger with unit CMC Ltd.
TCS had announced the merger late last year.
A court convened meeting of shareholders of TCS was called yesterday, and over 99% of the votes cast on the subject were in favor of the merger.
TCS already owned a majority stake in TCS, which will be extinguished upon the consummation of the deal.
The scheme of amalgamation will result in all equity shares of TCS in CMC ie. 154,89,922 equity shares of Rs 10 each (51.12 per cent of CMC’s paid up capital) getting automatically cancelled.
CMC shareholders will receive 79 equity shares of Re 1 each of TCS for every 100 equity shares of Rs 10 each of CMC. It will result in a 0.6 per cent increase in the paid-up capital of TCS from Rs 195.87 crore to Rs 197.04 crore.
TCS had taken a stake in CMC, formerly a Govt of India company, back in 1985. CMC is strong in networking, infrastructure, ports etc..
It employs over 11,000 employees.
TCS has around 3,00,000 employees, making it the largest private sector employer in India.
News of the merger came as a surprise to CMC and analysts, and was announced after TCS’ quarterly review meeting in October last year.
TCS is India’s biggest IT services company.