Grasim, Aditya Birla Chem to merge

The board of Grasim Industries today approved the proposed merger of Aditya Birla Chemicals (India) with itself and has approved the swap ratio at 1 share of Grasim for every 16  shares of ABCIL. 

In a statement, Grasim said it will issue 14.62 lakh new shares, which will increase its share capital to Rs 93.31 crore.

The proposed merger will consolidate Aditya Birla Group’s chlor-alkali business into Grasim and strengthen its existing portfolio of viscose staple fibre, caustic soda and allied chemicals in standalone company, the company said.

The merger will enable the geographical diversification for Grasim through the addition of ABCIL’s manufacturing facilities spread across the country.

It will also enable the business to capitalize growth opportunities by bringing in operational and financial synergies, backed by Grasim’s strength. The consolidation is in line with Aditya Birla Group’s philosophy to unify similar business in one company, the company said in a statement. 

Grasim is the leading manufacturer of caustic soda in India, with an installed capacity of 452,500 tons per annum. Its plants are located at Nagda (Madhya Pradesh) and a unit which was recently commissioned at Vilayat in Gujarat.

On the other hand, ABCIL is one of the leading chlor-alkali companies in India with three manufacturing plants located at Rehla (Jharkhand), Renukoot (UP) and Karwar (Karnataka) with an installed capacity of 293,000 tons of caustic soda per annum and 110 MW of captive power plant.