Tech Mahindra combines two US-based subsidiaries
PUNE, INDIA—IT services firm Tech Mahindra is consolidating two of its U.S.-based subsidiaries to streamline operations and reduce costs, ultimately boosting its offerings in the American market.
Born Group, Inc. (BORN), a step-down subsidiary, will merge with Tech Mahindra (Americas) Inc. (TMA), effective April 1, 2024. The merger is subject to regulatory approvals in the U.S.
BORN specializes in brand strategy, visual design, and brand identity for digital products and mobile apps in the U.S. market. Meanwhile, TMA provides IT consulting, programming support, and management services.
“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,” Tech Mahindra said in a filing.
The merger forms part of Tech Mahindra’s restructuring plan amid weak 2023 Q2 results. Last year, the company said that the plan would consolidate the Americas business into three units, combine Europe telecom and non-telecom under one leader, and consolidate Asia Pacific and Japan under a single Australia-based head. India will become a separate business unit.
In Q2, Tech Mahindra’s net profit dropped 61.6% to Rs 494 crore (US$59 million) as revenue declined 2% to Rs 12,864 crore (US$1.55 billion).
Tech Mahindra ranked #10 in the OA500 2024, an objective index of the world’s top 500 outsourcing companies. This is an improvement from its 11th-place finish in the OA500 2023.
