The National Company Law Tribunal (NCLT) has approved the plan of amalgamation and arrangement between L&T Infotech and Mindtree, according to a statement made on Monday by the Larsen & Toubro (L&T) Group. A scheme has been accepted by the NCLT’s Mumbai and Bengaluru benches in accordance with the 2013 Companies Act.
The two companies announced their intention to merge in May 2022. According to him, the merger will help L&T achieve its goal of increasing IT services to 25% of the group’s total business by 2026.
Both businesses will operate as a single entity beginning November 14, 2022. After Mindtree is delisted, LTI will become LTI-Mindtree. Shares of LTI will be distributed to all Mindtree shareholders at a ratio of 73 shares of LTI for every 100 shares of Mindtree.
L&T, the merging entity’s parent business, will own 68.73% of it. November 24, 2022 has been set as the record date for identifying Mindtree stockholders who are qualified to receive equity shares of LTI under the programme.
“LTI-Mindtree merger will create the sixth largest IT company by revenue and fifth largest by market cap. The IT sector will be affected due to geopolitical tensions and more but the merged entity will be better equipped to stand up to it,” A M Naik, group chairman of L&T and head of LTIMindtree, made this statement during a press conference.
“The merged entity will have benefits of scale, streamlined delivery and presence across verticals. The work ethics of Mindtree and LTI are consistent and anticipate no HR challenges with integration,” remarked Debashis Chatterjee, LTIMindtree’s CEO and MD. There will be 90,000 employees working for the combined company.
Naik added that the IT industry’s attrition issue would eventually get better. “There have been both warlike circumstances and actual war. Companies will start by reducing overhead, which includes IT. The attrition rate in the IT sector is currently between 22 and 24 percent, and he predicted a drop of 4 to 5 percent in the near future.