Minority shareholders of Grasim Industries and Aditya Birla Nuvo Ltd (ABNL) have approved the mega merger of the two companies to create a nearly Rs. 60,000-cr diversified entity. “The shareholders of Grasim, ABNL and Aditya Birla Financial Service Ltd at their meetings held on April 6 and April 10, 2017, respectively, have approved the scheme of amalgamation of ABNL with Grasim,” billionaire Kumar Mangalam Birla-led ABNL said in a regulatory filing. This would be followed by demerger of its financial service business as directed by the National Company Law Tribunal, it added.
The merged entity would be “Among the top five fund managers in India with funds under management of Rs. 2,29,500 cr and among top seven non HFC NBFC in India with a lending book of Rs. 29,852 cr.” Commenting on the development, Aditya Birla Group Chairman Kumar Mangalam Birla said, “The merger will create one of the India’s largest companies. It will undeniably lead to shareholder’s value by bringing together the strong balance sheet of Grasim and the high growth potential of ABNL’s business.” He further said, “The portfolio would now span the manufacturing and services business with leadership position in cement, financial services, telecom, textiles and chemicals sector.”
The scheme would be effective from the second quarter of this fiscal after getting necessary approvals from regulators and exchanges as NCLT, BSE and NSE. “The scheme is expected to be effective during the second quarter of the current financial year,” the company said. Aditya Birla Group in August last year announced the merger plan through a stock swap and spin off its financial services business into a separate unit. ABNL has stakes in telecom and retail businesses while Grasim is the owner of India’s biggest cement business through its unit UltraTech.
Shareholders of ABNL will get three new shares of Grasim for every 10 shares they hold. In the merged entity, which will retain the name Grasim, Aditya Birla Group will hold 39 per cent stake and the remaining 61 per cent will be with the public. The financial services company, to be called Aditya Birla Financial Services Ltd, is planned to be listed by May or June. Financial services businesses — from stock broking to insurance — are currently run by ABNL. Seven shares of the financial services company will be offered to each share held in Grasim, which will retain 57 per cent stake after the listing.
