Agrochemical major UPL Ltd today announced merger of the group's seed firm Advanta with itself as part of its strategy to provide all agri-solutions through one single entity and enhance shareholder value.
Post merger, UPL's geographical reach would expand and result in cost savings of Rs 90 crore annually.
The Mumbai-based UPL, formerly known as United Phosphorous Ltd, holds 48.44 per cent in Advanta Ltd and the same would be cancelled after the merger.
"The board of directors of UPL Ltd and Advanta Ltd today unanimously approved Advanta's merger with UPL, subject to necessary approvals," UPL said in a regulatory filing.
As per the proposed amalgamation scheme, the shareholders of Advanta Ltd will get one share of UPL for each held in the seed company.
That apart, Advanta's resident shareholders, holding one share, will get three optionally redeemable convertible preference shares in UPL.
Similarly, non-resident shareholders of Advanta will get three compulsory convertible preference shares of UPL in exchange of one share in the seed company.
On conversion, 471 preference shares will be converted into 10 shares of UPL.
As per the scheme, Advanta GDR holders holding one GDR will be issued 1.06 GDR in UPL.
"Based on the recommendation swap ratio, UPL will issue 77.45 million new equity shares (face value of Rs 2) and 181.83 million new preference shares (face value of Rs 10) based on Advanta shareholding pattern as on November 20, 2015 (assuming full conversion of FCCBs and exercising of all ESOPs)," it added.
UPL Chairman R D Shroff said the merger will help in creating sustainable shareholder value through accelerated growth and simplified group structure.
"This is a significant step in our goal to be among the largest agrochemical and seed companies globally," he added.
Jai Shroff, the global CEO of UPL and Vice-Chairman of Advanta, said this merger will help UPL in expanding its product portfolio to cover the agri-value chain and engage directly with farmers.
UPL has 28 manufacturing facilities in 9 countries and is 11th agrochemical company globally. The company's revenue for 2014-15 was about USD 2 billion.