Two TVS group cos. to unite

CHENNAI, APRIL 9. TVS Electronics Ltd., makers of computer peripherals, has merged with TVS eTechnology, engaged in business process outsourcing. The boards of the two companies saw several synergies in the businesses and decided to merge the entities.

The resolution approving the scheme of merger was passed with a majority at the extraordinary general meeting of TVS Electronics convened by the Madras High Court here today.

The Chairman and Managing Director of TVS-E, Gopal Srinivasan, who chaired the meeting, told newspersons here that the board had approved the merger at a stock swap ratio of 1:1. After the merger, the new entity would be named as TVS Electronics Ltd.

With the shareholders' approval, the scheme will now be taken up for approval to the Madras High Court.

The merger process is expected to be completed before September.

The TVS-E chief said the merger would leverage the best practices of the two companies and identify new marketing opportunities.

The synergies derived from this merger would provide scope for economies of scale and reduction in operating and administrative costs.

To address the emerging opportunites, TVS-E, he said, was organising itself into focused business groups.

The eAppliances business group had transformed itself from an IT appliance to an IT products and solutions business, with its foray into transaction solutions.

The eServices business group had evolved into a healthy business process outsourcing unit in the electronics manufacturing services area.

The company aimed to increase its profitability through products and services and will scale-up through global BPO.

Mr. Gopal Srinivasan said 2002 had been a significant year for IT products and solutions. The company had successfully established two products designed in-house by its R&D team. TVS Sprint, a retail automation product, bringing the power of IT to the common retail trader, had established itself well in the grocery vertical in several towns of Tamil Nadu. TVS-E reported a turnover of Rs. 210 crores for the year ended December 2002.