Aug 12, 2016 10:37 AM IST | Source: CNBC-TV18

AB Nuvo to merge with Grasim; swap ratio at 100:30

The shareholders of AB Nuvo, for every 100 shares, will get 30 shares of the Grasim. Post the initial merger of the two companies, financial services business of the AB Nuvo will come into ABFSL, in which shareholders will get 210 shares.

The boards of AB Nuvo and Grasim have entered into a two-way restructuring process to merge AB Nuvo into Grasim. The shareholders of AB Nuvo, for every 100 shares will get 30 shares of Grasim. 

The first step involves merging AB Nuvo with Grasim following which the financial services business of AB Nuvo will come into Aditya Birla Financial Services (ABFSL).

ABFSL is expected to be listed on stock exchanges post the merger. Shareholders of AB Nuvo will get 210 shares in ABFSL for every 100 shares post the listing while the Grasim shareholders, holding 100 shares, will get 700 shares in the financial business.

The deal is expected to be completed by this year-end.

Post the merger, 17 percent shareholding in the holding company will be held by promoters, 57 percent by Grasim and rest 26 percent by public. 

Addressing the press conference, Kumar Mangalam Birla said that the demerger and listing of financial services business will unlock value for shareholders. Business restructuring will also simplify the group ownership.

AB Nuvo, a USD 3.6 billion conglomerate, owns life insurance, financial services and solar businesses apart from 23 pecent stake in group telecom firm Idea and four divisions.

Grasim is a leading cement player, and also owns viscose staple fibres, chemicals and textiles businesses.

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