The $41 billion Aditya Birla group on Thursday announced major rejig of its companies involving merger of Aditya Birla Nuvo Ltd with Grasim Industries Ltd and the subsequent demerger and listing of its financial services business through a composite scheme of arrangement.
The Board of Directors of three companies — Grasim Industries, Aditya Birla Nuvo and Aditya Birla financial Services Ltd — at their respective board meetings approved the scheme.
The restructuring involves two steps namely merger of Aditya Birla Nuvo with Grasim Industries and demerger of its financial services business resulting in a listed financial services company with 57 per cent owned by post-merger Grasim Industries and the remaining shares held by post-merger Grasim Industries shareholders on a proportionate basis.
The Board also approved share-swap ratio for the restructuring. Grasim will hold 57% stake in demerged financial services company.
For merger of Aditya Birla Nuvo with Grasim Industries, each shareholder of Aditya Birla Nuvo will get three new equity shares of Grasim Industries for every 10 equity shares held in Aditya Birla Nuvo.
In other words, a shareholder owning 100 shares in Aditya Birla Nuvo will get 30 shares in Grasim Industries.
For demerger of financial services business into Aditya Birla Financial Services, each shareholder of Grasim Industries (post-merger) will receive equity shares in Aditya Birla Financial Services for every one equity share held in Grasim Industries.
In other words, a shareholder holding 100 shares in Grasim Industries will receive 700 shares in Aditya Birla Financial Services.
In aggregate, each shareholder of Aditya Birla Nuvo holding 100 shares will receive 30 shares in Grasim Industries and 210 shares in Aditya Birla Financial Services, the group said in a statement.
The Board of Grasim has also recommended sub-division of its equity shares of Rs 10 each into 5 equity shares of Rs 2 each. The exchange ratio as stated above would be adjusted accordingly to take into account the effect of such sub-division.
“The proposed restructuring will create one of India’s largest, well diversified companies with a healthy mix of businesseswith steady cash flows and long-term growth opportunities. The demerger and listing of financial services business will unlock value for shareholders,” Kumar Mangalam Birla, Chairman, Aditya Birla Group, was quoted as saying in the statement.