In a season of takeovers and mergers, two Indian IT firms have announced their intentions to combine operations into a single entity. Hyderabad-based Four Soft Ltd and Chennai-based Take Solutions Ltd, providers of IT products and solutions in the supply chain management space, on Friday announced their intent to merge, subject to approvals from their respective shareholders.

Both companies have already received in-principle approval from their board of directors to consider the merger. A successful deal will create a global, comprehensive company with one of the largest product offerings in supply chain management. In addition to their strengths in supply chain management, Take Solutions specialies in the life sciences area while Four Soft has considerable expertise in logistics.

Both company boards will appoint independent firms of chartered accountants and financial advisors to reach a fair valuation for the shareholders of both the companies, after which they will meet to consider the reports. The evaluation process is expected to take six to eight weeks.

Both the companies' management commented favourably on the deal, stressing especially on the synchronicity between their respective strengths. Srinivasan HR, vice-chairman of Take Solutions, said that his company's strengths in the US and Asia-Pacific markets will be ably complemented by Four Soft's dominance in Europe and Japan, calling the latter "a perfect foil to Take Solutions".

Palem Srikanth Reddy, chairman and CEO, Four Soft Ltd said, "Four Soft has full service products and offerings on the service provider segments. Take Solutions' product offerings complement this very well on the enterprise side. The combined range of Intellectual Property is unmatched globally and will enable both, good customer traction and good shareholder value".

Investors responded positively to the announcement on a day the markets registered impressive gains. While Four Soft's stock ended 4.87 per cent higher at Rs.25.85 on the Bombay Stock Exchange, Take Solutions' shares received a milder response and notched up gains of 1.98 per cent to Rs.767.55 at the same bourse.