Aditya Birla Nuvo to Merge With Grasim
Aditya Birla to list financial services arm post group merger.
Aditya Birla Group on Thursday announced the merger of the Aditya Birla Nuvo Ltd. with Grasim Industries Ltd.
After the merger, the financial services business of Aditya Birla Nuvo will be demerged and subsequently merged with Aditya Birla Financial Services Ltd. The proposed restructuring includes the listing of Aditya Birla Financial Services Ltd., according to a statement to exchanges from Aditya Birla Nuvo.
The proposed restructuring will create one of India’s largest, well-diversified companies with a healthy mix of businesses with steady cash flows and long-term growth opportunities. With diverse businesses spanning manufacturing and services, the combined company provides a play on India’s growth story. The demerger and listing of the financial services business will unlock value for shareholders.Kumar Mangalam Birla, Chairman of Aditya Birla Group (Source: Press Release)
The Swap Ratio
For Merger of ABNL with Grasim
- Each shareholder of ABNL will get 3 new equity shares of Grasim for every 10 equity shares held in ABNL.
For demerger of financial services business into ABFSL
- Each shareholder of Grasim (post-merger) will receive 7 equity shares in ABFSL for every 1 equity share held in Grasim.
Essentially, each shareholder of ABNL holding 100 shares will receive 30 shares in Grasim and 210 shares in ABFSL.
Grasim Stock Split
The Board of Grasim also recommended a stock split of its equity shares of Rs 10 each into 5 equity shares of Rs 2 each.
The exchange ratio for the Grasim-AB Nuvo merger will be adjusted to take into account the effect of the stock split, the company added in its press release.
Transaction Timeline
The scheme is subject to approval from shareholders, creditors, high courts and regulatory authorities.
The transaction is expected to be completed by the fourth quarter of financial year 2016-17 or first quarter of the next financial year, KM Birla said in a press conference.