Shareholders back AB Nuvo-Grasim merger
Shareholders have approved a merger between AB Nuvo, a diversified financial services firm, and Grasim Industries, a building materials manufacturer. The deal will create a new firm with a combined revenue of $9bn and the new company will be named Aditya Birla Financial Services.
Shareholders have approved the merger of AB Nuvo Limited and Grasim Industries that will create a firm with USD 9 billion in combined revenue. "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," Aditya Birla Nuvo said in a regulatory filing. This would be followed by demerger of its financial service business as directed by the National Company Law Tribunal, the filing added. "The merger with Grasim was approved by more than the requisite majority," said Kumar Mangalam Birla, Chairman of the Aditya Brila Group. The financial services company, to be called Aditya Birla Financial Services Ltd, is planned to be listed by May or June. He said the de-merger and listing of the financial services business will unlock shareholder value. The AB Nuvo and Grasim merger will create one of India’s largest diversified companies with a mix of business and steady cash flows. "The scheme is expected to be effective during the second quarter of the current financial year," the company said. 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 percent stake and the remaining 61 percent will be with the public. 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. The Aditya Birla Group is also in the process of merging its telecom business, Idea Cellular, with Vodafone India. Aditya Birla Nuvo is the promoter shareholder of Idea with 23.25 percent stake, while Grasim is one of the co-promoters with 4.75 percent stake. (With PTI inputs)