Grasim to fold ABCIL into itself on share swap ratio of 1:16

Grasim Industries has decided to merge Aditya Birla Chemicals India (ABCIL) with itself at a swap ratio of 1:16. “The board of directors of Grasim Industries approved the proposed merger of ABCIL with Grasim.

The swap ratio approved by the board is one share of Rs 10 each of Grasim for every sixteen shares of Rs 10 each of ABCIL,” Grasim informed the exchanges. Grasim will issue 14.62 lakh new shares, which will increase its share capital to Rs 93.31 crore, it added.

The proposed merger will be subject to approvals of the High Court, Competition Commission of India, Stock Exchanges, shareholders and lenders/creditors, statutory and other regulatory approvals, if any.

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.

Diversification

The merger will enable geographical diversification for Grasim through the addition of ABCIL's manufacturing facilities. The consolidation is in line with Aditya Birla group's philosophy to unify similar business into one company and brings operational and financial synergies, Grasim added.

Grasim is the leading manufacturer of caustic soda in India with an installed capacity of around 4.52 lakh tonnes per annum. Its plants are located at Nagda (Madhya Pradesh) and Vilayat (Gujarat). Caustic soda is an input in the manufacture of viscose staple fibre, which is a major business of Grasim.

ABCIL is one of the leading chlor-alkali companies in India with three manufacturing plants located at Rehla (Jharkhand), Renukoot (UP) and Karwar (Karnataka) with an installed capacity of around 2.93 lakh tonnes of caustic soda per annum and 110 mW of captive power plant.