"This merger is a key part of our strategy to deliver industry leading performance and this would make us a company with an annual revenue of $ 2.4-billion approximately, with more than 75,000 workforce and over 350 active clients across 54 countries," Tech Mahindra vice-chairman and managing director Vineet Nayyar told reporters in Mumbai.
Nayyar, who is also chairman of Mahindra Satyam, said the merger happens now as the company has achieved all the targets set for itself and it was appropriate to start the merger process as the new company is ready to take off.
The merger ratio is pegged at 8.5:1, which means share holders get 8.5 share of Mahindra Satyam for each share of Tech Mahindra.
Nayyar said the new entity will be head-quartered in Mumbai and the merger will be effective retrospectively from April 1, 2011, while the full integration process will take another nine months.
He also said both the companies will have separate AGMs for this fiscal.
Nayyar said the new management structure is not finalised yet as a revamp of the existing management is on the anvil.
To a query on a possible delisting of Satyam shares from the Nasdaq, Nayyar answered in the negative.
Earlier, the companies informed the exchanges that their boards approved the merger with an exchange ratio of 2:17 ratio.
Two shares of Tech Mahindra will be given for 17 shares of Mahindra Satyam, with shareholders getting one share of Tech Mahindra for 8.5 shares of Satyam.
The companies said 20.4 crore equity shares of Rs 2 each of Mahindra Satyam will be transferred to a trust of which Tech Mahindra will be the beneficiary.
The companies were advised by JP Morgan, Morgan Stanley and KPMG for the merger process.
Tech Mahindra took over the reins of the scam-hit Satyam Computer Services in April 2009 by picking up 31 per cent stake for $351 million at Rs 58 per share, a 23 per cent premium, in a government monitored deal.
The company was rebranded as Mahindra Satyam.
The deal saw the Mahindras edging out existing partner engineering conglomerate Larsen & Toubro, widely seen as a front-runner, and private equity firm WL Ross & Co.
Founder and the then chairman of Satyam B Ramlinga Raju in January 2009 had admitted to multi-crore accounting fraud of around Rs 7,000 crore (Rs 70 billion) at the beleaguered firm.
At 1 pm, Tech Mahindra scrip was trading up 2.8 per cent at Rs 666.40, while Satyam was trading at Rs 76.05 or 2.56 per cent up after being beaten down by the market initially.
BSE index Sensex was up 120 points.
For the October-December quarter, Mahindra Satyam reported a stronger-than-expected 5-fold jump in net profit to Rs 308 crore (Rs 3.08 billion), helped by a fall in the rupee value.
Its consolidated revenue rose to Rs 1,718 crore (Rs 17.18 billion), up 34 per cent.
The total headcount of the company stood at 32,280, a net addition of 188 quarter-on-quarter.
Tech Mahindra, for the same quarter, reported 7.3 per cent spike in net profit to Rs 276 crore (Rs 2.76 billion), backed by gains from its associate firm Mahindra Satyam.
Its revenue rose to Rs 1,445 crore (Rs 14.45 billion), up 19.3 per cent.
The increase in the topline was despite a drop of revenue from its largest client BT.
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