Tata Motors has completed the transfer of its defense business with effect from 1 April 2021 to Tata Advanced Systems (TASL) for an upfront consideration of Rs 227.7 crore.
The transfer has been completed through a slump sale as per Scheme of Arrangement approved by National Company Law Tribunal at Mumbai and Hyderabad. Over the next several months, Tata Motors and TASL will work closely to ensure smooth transition of the Defense business.
TASL, a wholly owned subsidiary of Tata Sons Pvt., is focused on providing integrated solutions for aerospace, defense and homeland security. The sale of Defense business to TASL is in line with Tata Group's strategy of consolidating the defense businesses under a single entity to bring scale and synergy.
Tata Motors will continue to play a significant role in the value chain by supplying chassis and aggregates to TASL for developing specialized defense applications, while continuing to supply pure civilian PVs and CVs to defense forces directly.
TASL will invest in enhancing design & development capabilities for expanding the global footprint and providing specialist, high value-added, futuristic solutions to defense customers in and outside India. The consolidation will yield benefits in the form of operational and financial synergies helping deliver better value for both the entities.
The announcement was made after market hours on Thursday, 1 March 2021. Shares of Tata Motors rose 1.9% to settle at Rs 307.60 on Thursday.
Tata Motors has been in the defense sector for several decades, and currently has a wide portfolio of logistics, combat support and armoured vehicles for the defense, paramilitary and state police forces.
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