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ABNL, Grasim Amalgamation Gets Shareholders' Nod
Apr 15, 2017

The shareholders of Grasim Industries Ltd, Aditya Birla Nuvo Ltd (ABNL) and Aditya Birla Financial Services Ltd (ABFSL) have approved the Scheme of amalgamation of ABNL with Grasim followed by the demerger and listing of the Financial Services business, creating a large combination of manufacturing and service businesses with leadership positions.


The approval by shareholders paves way for consolidation of common businesses and investments of Grasim and ABNL resulting in leadership positions for the company across the textiles, chemicals, cement and telecom sectors.


The merged entity Grasim, will have proforma consolidated turnover of Rs 59,766 crore, EBITDA of Rs 11,961 crore and a net profit of Rs 4,245 crore for the year ended March 31, 2016. It will be: a leading player in textiles and chemicals, the no.1 cement company in India with the largest selling brand, no.3 telecom operator in India, and among the top four private sector life insurers and asset management companies in India.


With all major approvals in place, the Scheme is now subject to final approval from NCLT and the BSE and the NSE. The scheme is expected to be effective during the second quarter of the current financial year.


“It augurs well that the public shareholders of both Grasim and ABNL have approved the merger by much more than the requisite majority. The merger will create one of the India’s largest companies. It will undeniably lead to shareholders’ value by bringing together the strong balance sheet of Grasim and the high growth potential of ABNL’s businesses. The portfolio will now span the manufacturing and services businesses with leadership positions in the cement, financial services, telecom, textiles and chemicals sectors. I believe, the merged entity provides a splendid play on India’s growth story. Additionally, the demerger and listing of the financial services business will unlock shareholders’ value,” said Aditya Birla Group chairman Kumar Mangalam Birla.


“We ardently believe that the strong parentage of Grasim will enable the financial services business in enhancing its competitive advantage and growth momentum. The shareholders of both the companies will get to participate in the structural growth story of the financial services business while sharing the strong returns generated by other market leadership businesses. The recent corporate actions (FII limit enhancement, share split, setting out dividend policy, etc.) reflect that shareholders’ value creation will continue to remain high on the management’s radar in the merged entity,” said Sushil Agarwal, Group CFO, Aditya Birla Group.