February 12: Hindustan Lever and Ponds India, both Unilever subsidiaries in the country, have decided to merge, creating a huge personal products giant with overwhelming control of the Indian market. The combined turnover of the two companies is Rs 8,289 crore. Exercising abundant caution after a previous merger announcement had caused problems with regulator SEBI a year ago, Hindustan Lever announced the merger at a very preliminary stage, even before the valuation assignment for the merger has been formally handed over to Y H Malegam, senior partner of S B Billimoria & Co and Arun Gandhi, senior partner of N M Raiji & Co."The announcement of intended amalgamation is being made at this early and preliminary stage to put the information in public domain and to make it available to the stock markets and investors in general," said a joint press release issued by Ponds India Ltd on the subject.
As a first step, says the release, it is proposed that HLL, a superstar trading house, will with immediate effectalso act as a merchant exporter for Ponds India exports. This will ensure greater benefits to PIL and all the other group companies.
"The proposed amalgamation will also ensure for the group benefits from large scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories, such as deodorants and other personal products," says the release.
The two managements have started drawing up the proposed scheme of amalgamation and other plans for integration. The formal scheme of amalgation of PIL with HLL together with the proposed share exchange ratio recommended by the joint valuers will be placed before the two boards, after due notice to the stock exchanges, for their evaluation, consideration and final decision, after the valuation report is available.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
