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Birlasoft, KPIT Technologies to merge to create two separate entities

The first entity would focus on digital business IT services, while the other business would focus on automotive engineering and mobility solutions

Bibhu Ranjan Mishra  |  Bengaluru 

Mergers&Acquisitions

Birlasoft, part of the $1.6-billion diversified CK Birla Group, and KPIT, have announced a merger to create an over $700-million combined entity. The entity would be demerged into two separate later. The first entity, which would focus on digital business IT services, would be known as Birlasoft, while the other business, which would focus on automotive engineering and mobility solutions, would be known as Technologies. The new Birlasoft, which would emerge over the next year, would combine the management team and the IT services business of with the current It would continue to be led by as the CEO and MD.

The new Technologies would be led by as the CEO and MD. "The board has approved a draft composite scheme for amalgamation of (India) with the company and demerger of the engineering business of the company into Engineering, a wholly-owned subsidiary of the company to be renamed as Technologies,” said in a regulatory filing. As a part of the proposed merger, and promoters would make an open offer for the minority shareholders of Shareholders of would receive 22 equity shares of the combined KPIT-for every nine equity shares of The shares of KPIL Engineering would be listed pursuant to the proposed demerger and the shareholders of combined KPIT-would receive one share of KEL for every one share they hold in the combined firm, it said. "After the proposed demerger, the existing promoters of the company propose to acquire sole control and substantial shareholding in KEL from the promoters," it added. During the period prior to completion of the deal, and will continue to be run by their current managements. The new would be a $500-million digital business IT services company that will be created by merging the ITSS business with the current The new mid-tier IT services company would also be called The new Technologies would be a $200 plus-million focused engineering services company that would be created by tapping into the current engineering business of to create a company focussed on automotive engineering and mobility solutions. “Digital solutions are today not confined to the periphery of business but are transforming the very core of business processes. The digital age requires each organisation to reinvent itself to address and lead the disruption and opportunities it brings,” said Amita Birla, chairman of Ravi Pandit, chairman of KPIT, said: “The tremendous value created by over the last 27 years will continue in two new avatars and become leading in their respective spaces.” Kotak Investment Banking was the advisor to the CK Birla Group and while Avendus was advisor to

First Published: Mon, January 29 2018. 23:46 IST
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