Aditya Birla Nuvo Ltd (ABNL) will soon merge with Grasim Industries Ltd.
The board of directors of Grasim Industries Ltd, ABNL and Aditya Birla Financial Services Ltd (ANFSL) approved the merger of ABNL into Grasim and subsequent demerger and listing of the financial services business through a composite scheme of arrangement.
The transaction which is subject to regulatory approvals would be implemented in two phases.
With this merger, the Aditya Birla Group decided to hive off its financial services business into a separate entity, which will be listed later.
First, ABNL would merge into Grasim and thereafter the financial services business would be demerged resulting in a listed financial services company with 57 per cent owned by post-merger Grasim and the balance being held by post-merger Grasim shareholders on a proportionate basis.
Post-merger, Grasim, with an aggregate turnover of Rs.59,766 crore and EBITDA of Rs.11,961 crore for the year ended March 31, 2016, will become India’s top cement company and will be amongst the top 10 diversified private NBFCs in India.
It will be the third-ranked telecom operator besides being among the top four private sector life insurance and asset management companies in India.
The proposed transaction will create a combined entity with $9 billion revenues, EBITDA of Rs 12,000 crore and EBIDTA margins of 19 per cent.
For the merger of ABNL with Grasim, each shareholder of ABNL will get three new equity shares of Grasim for every 10 equity shares held in ABNL which means a shareholder holding 100 shares in ANBL will receive 30 shares in Grasim.
For the demerger of the financial services business into ABFSL, each shareholder of Grasim (post-merger) will receive seven equity shares in ABFSL for every one equity share held in Grasim which means a shareholder holding 100 shares in Grasim will receive 700 shares in ABFSL.
In aggregate each shareholder of ABNL holding 100 shares will receive 30 shares in Grasim and 210 shares in ABFSL.