Tejas Networks, part of the Tata Group and a prominent Indian optical vendor, has announced plans to merge with Saankhya Labs in a two-phased process.

The company will initially acquire a 64.4% stake in Saankhya Labs for INR2.84 billion ($37.49 million) in an all-cash deal that is likely to be executed over the next 90 days.

Tejas intends to acquire the remaining 35.6% stake through a merger process or a secondary acquisition, the company said in a press statement.

Figure 1: The purchase of Saankhya is in line with Tata Group's foray into in the
semiconductor business.
(Source: Seemanta Dutta/Alamy Stock Photo)

Founded in 2007, Saankhya Labs is one of the few Indian companies to have developed its own chip, and was the only non-service provider to be given 5G spectrum to conduct trials.

Over the years, the company has acquired 73 international patents, and it is building software-defined radios (SDRs).

Chipping away

The purchase of Saankhya is in line with Tata's foray into the semiconductor business.

The group is in talks with three states in southern India – Tamil Nadu, Karnataka and Telangana – to set up a $300 million semiconductor unit.

In addition, Tata Consultancy Services, Tata Communications Transformation Services (TCTS) and Tata Teleservices are looking at playing a bigger role in the 5G ecosystem.

Tejas Networks' acquisition of Saankhya Labs, with its own chip and 5G RAN solution portfolio, will help them offer a wider range of 5G products and solutions.

"This acquisition shows our continued commitment to expand our wireless product offerings to address the growing market opportunity," Tejas Networks CEO and MD Sanjay Nayak said in a press statement.

"Saankhya's products would complement our existing 4G/5G radio access network products and position as well for the emerging opportunities in the O-RAN and 5G broadcast space."

Come together

Saankhya Labs benefits by being a part of a bigger group – accessing new markets and scaling its business.

"Our customers and partners will also benefit from a larger product portfolio and an accelerated roadmap of our product," said Parag Naik, co-founder and CEO of Saankhya Labs.

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"This merger will further Saankhya's founding team's vision to build a world-class technology company from India."

Post merger, One Media 3.0 LLC, the largest shareholder of Saankhya, will sell its majority shareholding in the semiconductor firm and retain a minority shareholding in Tejas Networks.

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— Gagandeep Kaur, contributing editor, special to Light Reading