Tata Motors' vehicle financing unit will merge with non-banking financial company Tata Capital in a share swap deal, the Indian carmaker said on Tuesday.
Tata Motors Finance's shareholders will receive 37 Tata Capital shares for every 100 shares they hold, the company said.
In March, Tata Motors said it will split into two listed companies, separating its commercial vehicle business from its passenger vehicle arm, which will house the lucrative Jaguar Land Rover business.
The merger of the vehicle financing unit with Tata Capital aligns with the company's objective of exiting non-core businesses, Tata Motors said in a statement.
Tata Capital, the financial services arm of the Tata Group, offers vehicle loans as well as home and education loans.
Tata Motors will hold a 4.7% stake in the merged entity after the deal is completed.
