Aditya Birla Chemicals (India), part of the metals-to-telecom Aditya Birla Group, will merge with Grasim Industries, another firm of the Kumar Mangalam Birla-led group, the two companies informed the bourses on Wednesday.
Both listed companies operate in similar spaces. Grasim is the country’s largest manufacturer of caustic soda, which feeds into its main business of making viscose filament yarn (VFY). Aditya Birla Chemicals makes bulk and specialty chemicals, including caustic soda.
Under the approved swap ratio, ABCIL shareholders will receive an equity share with a face value of Rs10 in Grasim for every sixteen held in ABCIL. Grasim will issue 14.62 lakh new shares, which will increase its share capital to Rs 93.31 crore.
A roguh calculation shows that once the proposed merger is implemented, the promoters’ shareholding in Grasim will go up marginally to around 26% from 25.5% at present.
“The proposed merger will consolidate Aditya Birla Group’s Chlor-Alkali business into Grasim and strengthen its existing portfolio of VFY, caustic soda and allied chemicals in the standalone company,” a statement by Grasim said.