Tata Motors to merge its subsidiary TML Drivelines unit with itself for synergy, cost-cutting
The Tata Motors -- TML Drivelines merger would enable “synergy of operations, optimisation of resources, reduction of statutory and legal compliance requirements and overall cost management”.business Updated: Jun 20, 2017 13:28 IST
Tata Motors will merge its automotive component-making subsidiary TML Drivelines with itself, according to a filing with the stock markets on Tuesday.
The ‘scheme of merger and arrangement’ document filed with the Bombay Stock Exchange and National Stock Exchange stated that Tata Motors will merge its wholly-owned subsidiary TML Drivelines Ltd with itself, thereby “dissolution without winding up” of TML Drivelines.
TML Drivelines makes automotive components such as axles, gearboxes, crankshaft and forgings for commercial vehicles for Tata Motors.
The merger would enable “synergy of operations, optimisation of resources, reduction of statutory and legal compliance requirements and overall cost management”, especially in the Goods and Service Tax (GST) regime, which in turn would help in “developing stronger base for future growth”, the document said.
In 2000, the axle and transmission divisions of Tata Motors was spun off as its separate 100% subsidiaries -- HV Axles Ltd (HVAL) and HV Transmission Ltd (HVTL). “The key intent of incorporation was to give specialist focus on development and supplies of axles and transmissions for Tata Motors, while Tata Motors concentrated on vehicle design, integration & marketing,” the company website read.
HVAL and HVTL were again merged in 2011-12 as Total Driveline Solutions Provider and was later renamed as TML Drivelines Limited.