The Mahindra group Wednesday approved the merger of its IT services providers Mahindra Satyam and Tech Mahindra Ltd. The combined revenue of the merged companies is expected to touch $2.4 billion, making it India's fifth largest software services exporter.

Anand Mahindra
Anand Mahindra, Chairman of the Mahindra group, speaks during a news conference in the southern Indian city of Hyderabad on April 20, 2009.

The exchange ratio for the merger has been fixed at 2:17; that is, every share of Tech Mahindra would be equivalent to 8.5 shares of Satyam.

Satyam, originally Satyam Computers, almost collapsed a few years ago after its former chairman and founder Ramalinga Raju revealed that the profits of the company were overstated. Raju was later jailed on charges of embezzlement and insider trading. The company was sold to Tech Mahindra, a unit of Mahindra & Mahindra, in April 2009.