Aditya Birla Industries owned bulk and specialty chemicals manufacturer Aditya Birla Chemicals India Ltd. (ABCIL) Wednesday said it was merging with Grasim Industries, also owned by the same group. The Board of Directors of Grasim Industries Ltd. Wednesday approved the proposal. In a statement, Grasim said the company board approving the merger of Aditya Birla Chemicals fixed the swap ratio at 1:16.
In other words, Grasim will issue one share of Rs.10 each to every 16 shares of Rs.10 each of Aditya Birla Chemicals.
“Grasim will issue 14.62 lakh new shares, which will increase its share capital to Rs. 93.31 crore,” the statement said.
Grasim is the leading manufacturer of caustic soda in India, with an installed capacity of 452,500 tonnes per annum.
Caustic soda is inter-alia used as an input in the manufacturing of viscose staple fibre, which is a major business of Grasim.
On the other hand, Aditya Birla Chemicals has 293,000 tonnes caustic soda capacity and 110 MW captive power plant. According to Grasim, 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. The merger will enable the geographical diversification for Grasim through the addition of Aditya Birla Chemicals’ 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. The consolidation is in line with Aditya Birla Group’s philosophy to unify similar business in one company, the statement said. Grasim recently posted a marginal rise in net profits by 0.5 percent at Rs. 333.6 crore for the quarter ended December 31 with consolidated net sales of Rs 7,888 crore. (IANS)