DEMERGER OF SANDVIK ASIA PVT. LTD.

Date: 
Friday, August 28, 2020

Sandvik Asia Private Limited (SAPL), a subsidiary of Sandvik AB, Sweden was incorporated on July 8, 1960 under the provisions of the Companies Act, 1956; with its registered office in Pune, India. Sandvik is a multi-product, multi-division entity, engaged in manufacturing, distribution and provision of sales & marketing services through its three business areas namely Sandvik Machining Solutions (SMS), Sandvik Mining and Rock Technology (SMRT) and Sandvik Materials Technology (SMT). Currently, Sandvik business in India has a pan-India presence and have attained a significant size and scale in the respective business segments in Mining, Materials Technology and Metal cutting. As the businesses now embrace their next phase of growth, it was thought that it would be strategically pertinent to have them restructured under separate entities to enable them to move forward independently, with greater focus and specialization building further on their respective capabilities and their strong business presence.

Consequently, effective August 1 2020, SAPL has been demerged into three independent and Business owned legal entities, namely Sandvik Mining and Rock Technology India Pvt. Ltd. (SMRTIPL), Sandvik Materials Technology India Pvt. Ltd. (SMTIPL); and Sandvik Asia Pvt Ltd (SAPL). SMRTIPL will take over the Mining business and will be led by Mr Subhasis Das. SMTIPL will take over Material Technology business and will be led by Mr Sharath Satish and SAPL will represent the Metal cutting business and will be led by Mr Kiran Acharya.

The demerger process started in early 2019 with an application to National Company Law Tribunal (NCLT) and concluded during mid 2020 with the final legal compliance with the Registrar of Companies (ROC). The resulting companies have accordingly been incorporated inter alia with the objective of legally undertaking the respective business segments. The transfer and vesting by way of demerger resulted in the re-organisation of share capital in addition to various other matters consequential or integrally connected therewith, which ultimately made the resulting entities operationally independent. Sandvik’s companies or their subsidiaries in India are not listed on any of the stock exchanges.

The demerger is expected to potentially benefit all the Sandvik businesses from this process and incremental operational efficiencies, thereby empowering all businesses to create further value. This strategic decision to structurally align Sandvik in India with the Sandvik Group’s global holding structure will thereby benefit the resulting companies to focus on the core business, have their own management teams and board of directors to achieve operational and managerial efficiency. The operating model of any of the businesses has not been affected by the legal entity change. Hence the way Sandvik does business will not be changed due to the modification of the legal structure, resulting in limited impact/change for our employees, customers and other stakeholders.

Pune August 26, 2020

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