CMC-TCS deal gets no-objection from BSE, NSE

Leading stock exchanges NSE and BSE have given clearance to the merger of IT firm CMC with India's largest software services firm Tata Consultancy Services (TCS).

The 'no-objection' from the exchange would allow the two companies to file their scheme of amalgamation with the High Court for further clearance of the deal.

Under the deal, CMC would be merged with TCS. CMC shareholders would get 79 equity shares of Re 1 each of TCS for every 100 equity shares of Rs 10 each of CMC.

The amalgamation will enable TCS to consolidate CMC's operations in a single company with rationalised structure, enhanced reach, greater financial strength and flexibility.

It will aid in achieving economies of scale, more focussed operational efforts, standardisation and simplification of business processes and productivity improvements.

In separate communications to CMC and TCS earlier this month, the exchanges said that they are granting 'no-objection approval' to the proposed scheme and this observation letter would be valid for six months, within which period the companies would have to file the scheme with the High Court for further clearance.

The exchange has noted the confirmation given by the company stating that the scheme does not violate or over-ride or circumscribe the provisions of various regulatory norms.

"Accordingly, we do hereby convey our 'no-objection' with limited reference to those matters having a bearing on listing /delisting/continuous listing requirements within the provisions of the Listing Agreement, so as to enable the Companies to file the Scheme with High Court," NSE said.

BSE said it reserve the right to withdraw its observation at any stage in case information submitted by the exchange would be incomplete or incorrect.

According to norms, companies seeking to execute merger or de-merger strategies need to obtain a 'no-objection certificate' from stock exchanges.

Earlier in October, the board of directors of both companies have approved the amalgamation.

The consolidated revenue of CMC for the quarter ended September 30, 2014 stood at Rs 616.69 crore with net profit of Rs 76 crore.

Incorporated in 1975, CMC has over 11,000 employees.