Grasim Industries, an Aditya Birla Group firm, today said its Board has approved merger of Aditya Birla Chemicals with the company in line with its vision to unify similar business in one company.
"The Board of Directors of Grasim Industries Ltd today approved the proposed merger of Aditya Birla Chemicals (India) Ltd (ABCIL)," the company said in a BSE filing.
The swap ratio approved by the Board is 1 share of Rs 10 each of Grasim for every 16 shares of Rs 10 each of ABCIL.
Grasim will issue 14.62 lakh new shares, which will increase its share capital to Rs 93.31 crore, the company said.
Elaborating on the reason behind merger, the company said: "The proposed merger will consolidate Aditya Birla Group's Chlor ? Alkali business into Grasim and strengthen its existing portfolio of viscose staple fibre, caustic soda and allied chemicals in standalone company."
It further said: "The merger will enable the geographical diversification for Grasim through the addition of ABCIL's manufacturing facilities spread across the country. It also enables the business to capitalise growth opportunities by bringing in operational and financial synergies, backed by Grasim's strength."
Grasim said the consolidation is in line with Aditya Birla Group's philosophy to unify similar business in one company.
The proposed scheme will inter alia require the approval of the Competition Commission of India, SEBI, the High Court of Judicature at Madhya Pradesh, Bench Indore & the High Court of Jharkhand at Ranchi and the shareholders/creditors of the respective companies, the company said.
Grasim is one of the manufacturers of caustic soda in India with an installed capacity of 452,500 tons per annum.
Its plants are located at Nagda (Madhya Pradesh) and a unit which was recently commissioned at Vilayat (Gujarat).
Caustic Soda is inter-alia used as an input in the manufacturing of viscose staple fibre, which is a major business of Grasim.
ABCIL is one of the Chlor-Alkali companies in India with three manufacturing plants located at Rehla (Jharkhand), Renukoot (U.P.) and Karwar (Karnataka) with an installed capacity of 293,000 tons of caustic soda per annum and 110 MW of captive power plant.