The Competition Commission has approved the restructuring of the two subsidiaries of country's largest software exporter Tata Consultancy Services.
The restructuring pertains to two entities -- e-Serve and TEIL.
"It is observed that the proposed combination is a group restructuring exercise and the ultimate control over the activities of e-Serve and TEIL would continue to be exercised by TCS, both prior to as well as pursuant to the proposed combination," the Commission said in order dated November 22. The proposed combination is, therefore, not likely to have any adverse competitive effect in India, the Commission said. TCS, e-Serve and TEIL are into the business of providing IT, ITeS and Business Process Outsourcing services. The combination process would consist of two parts -- amalgamation of e-Serve into TCS and the demerger of the Special Economic Zone (SEZ) undertaking of TEIL into TCS. TEIL is a wholly-owned subsidiary of TCS. TCS holds 96.26 per cent stake in TEIL through e-Serve. The Commission said TEIL SEZ includes the business of TEIL -- that primarily is providing information technology and information technology-enabled services carried out at SEZ locations in Chennai, Kolkata and Gurgaon. TCS along with TCS e-Serve Ltd and TCS e-Serve International Ltd had jointly filed an application seeking approval on November 12. The notice was submitted following a composite scheme of amalgamation after being cleared by their respective boards on October 19.