<article><a style="color: #000080;" href="http://www.dealstreetasia.com/?s=tata">Tata Steel Ltd</a> said on Tuesday it has decided to drop its plan to merge its units Tata Metaliks Ltd and Tata Metaliks DI Pipes Ltd with itself.</article>

<a style="color: #000080;" href="http://www.dealstreetasia.com/?s=tata">Tata Steel Ltd</a> said on Tuesday it has decided to drop its plan to merge its units Tata Metaliks Ltd and Tata Metaliks DI Pipes Ltd with itself.
Tata Steel said its committee of directors has agreed to apply for a recall of a Bombay high court order passed on 21 August 2015 sanctioning the scheme of amalgamation of Tata Metaliks and Tata Metaliks DI Pipes Ltd with itself.
The scheme was earlier recommended by the committee in April 2013 and approved in May 2014. Under the earlier approved scheme, the swap ratio for public shareholders was 4 shares of Tata Steel for every 29 held in Tata Metaliks Ltd.
The company said in its statement that the scheme is not effective at present. A petition filed by Tata Metaliks seeking an approval to the scheme from the Calcutta high court is pending. “Tata Metaliks has been advised to consider withdrawing the scheme with a leave to re-file a fresh scheme of merger of Tata Metaliks and Tata Metaliks DI Pipes,” the statement said.
Tata Metaliks in a separate statement to <a href="http://www.dealstreetasia.com/?s=bse">BSE </a>on Tuesday said its committee of directors have approved filing a fresh scheme to merge Tata Metaliks Di Pipes with itself. Tata Metaliks DI Pipes is a wholly-owned subsidiary of Tata Metaliks Ltd.
Tata Metaliks will continue to operate as a subsidiary of Tata Steel Ltd.
Koushik Chatterjee, group executive director (finance and corporate) Tata Steel, said the decision was taken due to delays and dilution in synergies from the merger. “The decision is based on careful consideration of various factors including inordinate delay in obtaining requisite regulatory and statutory approvals along with significant dilution in the intended synergies that were envisaged in April 2013,” Chatterjee said.
In 2013, the merger was expected to result in backward as well as forward integration of the steel-making operations from iron ore mining to downstream value-added products.
“It would have been better for Tata Steel to have all its operations streamlined under one company. A merger would have helped improve efficiency,” said Goutam Chakraborty, an analyst with brokerage <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=emkay">Emkay Global Financial Services.</a>
Tata Metaliks manufactures pig iron which is used further in the steel-making process. Its subsidiary Tata Metaliks DI Pipes is involved in the manufacturing of ductile iron pipes.
According to the Tata Metaliks statement, the firm had an annual revenue of Rs.1,038.37 crore; Tata Metaliks DI Pipes had an annual sales of Rs.644.32 crore in the financial year 2015-16.
On Tuesday, Tata Metaliks rose 20% to R140.40; Tata Steel gained 0.18% to Rs.326.95 on BSE while the benchmark Sensex gained 0.47% to 25,773.61 points.
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Tata Steel Ltd said on Tuesday it has decided to drop its plan to merge its units Tata Metaliks Ltd and Tata Metaliks DI Pipes Ltd with itself.

India: Tata Steel calls off merger of Tata Metaliks units with itself

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