“The proposed restructuring will c;reate one of India’s largest, well-diversified companies with a healthy mix of businesses with steady cash flows and long-term growth opportunities. (Bloomberg) -- Shareholders of Aditya Birla Nuvo Ltd., controlled by billionaire Kumar Mangalam Birla, approved plans for a merger with Grasim Industries Ltd. that would create a firm with $9 billion in combined revenue. First, ABNL will be merged into Grasim; that will be followed by the demerger of the financial services business. The group will hive off its financial services business into a separate entity. Aditya Birla Group is a premium global conglomerate, headquartered in Worli, Mumbai, India. It’s this demerger that has become a point of contention for the tax authorities. The transaction, subject to regulatory approvals, entails implementation of the scheme through two steps: merger … For the demerger of the financial services business into ABFSL, shareholders of Grasim (post-merger) will receive seven ABFSL equity shares for every Grasim equity share held. We have chalked down the ten important things you must know about deal. Mumbai: The shareholders of Grasim Industries Limited (“Grasim”), Aditya Birla Nuvo Limited (“ABNL”) and Aditya Birla Financial Services Limited (“ABFSL”) at their meetings held on 6th and 10th April 2017 respectively have approved the Scheme of amalgamation of ABNL with Grasim followed by the demerger and listing of the Financial Services business, in line with … It will be the third-ranked telecom operator besides being among the top four private sector life insurance and asset management companies in India. Dilip Gaur, Managing Director of Grasim, said the merger provides Grasim shareholders with exposure to fast-growing sectors, including telecom and financial services. The Grasim Industries–Aditya Birla Nuvo Limited Merger: Wealth Creation? The financial services and chemicals businesses will contribute 15 and 9 per cent, respectively. Grasim will again be seen as the holding company for financial services and hence will trade at holding company’s discount. The transaction will be completed by the end of the current fiscal; the financial services arm will be listed next year. Post-merger, the cement business will contribute 42 per cent followed by textile (17 per cent) and telecom (16 per cent). In its letter to the stock … Mr. Birla denied reports that the merger was effected to give Idea Cellular access to strong cash flows ahead of the spectrum bidding process. Aditya Birla Nuvo and Grasim Industries merger has been given a thumbs down by analysts who have called it a ‘dampener’. “It is done to increase promoters’ shareholding. Sectoral contribution The Honourable National Company Law Tribunal at Ahmedabad, had approved the merger of Aditya Birla Nuvo and Grasim Industries to be followed by the listing of Aditya Birla … Q4 target The balance 1 per cent will come from solar and insulator businesses. ABNL has interests in Aditya Birla Financial Services … Idea Cellular The merged entity will be used to raise funds for debt-laden Idea Cellular to bid for upcoming spectrum auctions.”, Mr. Sandeep Gurumurthi Group Head, Communication & Brand Win-win situation “In aggregate each shareholder of ABNL holding 100 shares will receive 30 shares in Grasim and 210 shares in ABFSL,” according to statement from the Aditya Birla Group. “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 … “With diverse businesses spanning manufacturing and services, the combined company provides a play on India’s growth story. The Financials. Combined entity The board of directors of Grasim Industries Ltd, ABNL and Aditya Birla Financial Services Ltd (ANFSL) at their respective meetings approved the merger of ABNL into Grasim and subsequent demerger and listing of the financial services business through a composite scheme of arrangement. Grasim has a cash surplus of Rs.500 crore, while Aditya Birla Nuvo has net debt of Rs.2,500 crore. With the merger, the Aditya Birla Group decided to hive off its financial services business into a separate entity, which will be listed later. Post-restructuring, promoters will own 17 per cent in the financial services business; Grasim will own 57 per cent. Kumar Mangalam Birla, Chairman, Aditya Birla Group, said the transaction was aimed at finding synergies between the various companies in the group and at unlocking value. Healthy mix of businesses The Aditya Birla group says the merger - if at all - will not impact the new Grasim as its holding in the merged entity will be proportionate to the current holding. Back in 2017, NCLT Ahmedabad approved the merger of Aditya Birla Nuvo and Grasim Industries. Aditya Birla Management Corporation Private Limited, 3 equity shares of Grasim for every 10 equity shares of Aditya Birla Nuvo, 7 shares of Aditya Birla Financial Services for every one equity share of Grasim (post merger). On August 11, 2016, the chairman of Aditya Birla Group (ABG) announced that ABG would merge Aditya Birla Nuvo … Barnali Chaklader, Garima Chaklader. | Updated on January 11, 2018 Published on July 17, 2017 Shares of Grasim Industries and Aditya Birla Nuvo will remain in focus ahead of the merger. In aggregate, anyone holding 100 ABNL shares will receive 30 shares in Grasim and 210 shares in ABFSL. “It''s a win-win for shareholders of both companies as Grasim shareholders will get access to high-growth businesses of financial services and telecommunications while Nuvo shareholders get strong cash flow business of cement and VSF.”. Publication Date: 02/07/2020. “The merger will unlock value for shareholders,” said Kumar Managalam Birla, Chairman of the Aditya Birla Group. Grasim Industries split its shares of face value Rs 10 each into five face value Rs 2 each on Thursday. NEW DELHI: Pantaloons Fashion & Retail Ltd today said it has fixed January 21 as the Record Date for determining the entitlement of the equity shareholders of Aditya Birla Nuvo Ltd upon merger of Aditya Birla Group's apparel businesses. The merger will also consolidate the cross-holding within the group as both companies own stakes in Idea Cellular, Aditya Birla Fashion and Retail and Hindalco Industries. In other words, a shareholder having 100 Grasim shares will receive 700 ABFSL shares. In an exclusive chat with ET Now, Sushil Agarwal, Group CFO, Aditya Birla Group speaks about the big Grasim-Nuvo merger. Promoter holding The transaction which is subject to regulatory approvals would be implemented in two phases. The transaction is expected to be completed by the fourth quarter of this year or in the first quarter of the next financial year. So, the restructured Grasim will have net debt of Rs.2,000 crore after the merger. The demerger and listing of the financial services business will unlock value for shareholders,” Birla said. Demonstrate that you have researched the problems in this The Grasim Industries–Aditya Birla Nuvo Limited Merger Wealth Creation case study. The Board also … The merger is basically to unlock value for investors as the financial services business, which was nurtured by Aditya Birla Nuvo, has grown substantially over time, said Birla. The board of Grasim has also recommended sub-division of its equity shares of Rs.10 each into five equity shares of Rs. The Aditya Birla Group on Thursday announced a plan to merge Aditya Birla Nuvo Ltd (ABNL) with Grasim Industries to c;reate an entity with combined revenue of Rs.60,000 crore. The Aditya Birla Group on Thursday announced a plan to merge Aditya Birla Nuvo Ltd (ABNL) with Grasim Industries to create an entity with combined revenue of ₹60,000 crore. 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% owned by post-merger Grasim Industries and the remaining shares held by post-merger Grasim Industries shareholders on a proportionate basis. Demerger of Grasim’s financial services undertaking to Aditya Birla Capital was also part of the restructuring exercise which received the tribunal’s approval. A combined 989,267 shares changed hands on the counter on the NSE and BSE. In April 2016, Aditya Birla Nuovo got approval for merger of itself into Grasim Industries. The Aditya Birla Group on Thursday announced a plan to merge Aditya Birla Nuvo Ltd (ABNL) with Grasim Industries to c;reate an entity with combined revenue of Rs.60,000 crore. The demerger and listing of the financial services business will unlock value for shareholders.”, — Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group. That the deal is done to fund Idea is not correct and it''s like jumping the gun.” He said there will be no exposure to Idea''s debt for the new merged entity. Aditya Birla Financial Services Ltd (currently under Nuvo) contributes significantly to the revenues of ABNL. Mumbai: The Aditya Birla Group is merging two of its main companies, Aditya Birla Nuvo Ltd (Nuvo) and Grasim Industries Ltd, both of which also … The company said post market … Aditya Birla Nuvo, formerly called Indian Rayon & Industries, will cease to exist after the merger. The current restructuring of group holdings has nothing to do with Idea whatsoever, he said. The aim of AB Nuvo-Grasim merger is not to fund Idea Cellular for battle with RJio: KM Birla 13 Aug, 2016, 10.46 AM IST "The key leverage from the merger will be for its financial services business that can avail of a strong balance sheet of a large, diversified group that is banking on India’s growth." NEW DELHI: Shares of Grasim Industries and Aditya Birla Nuvo advanced up to 2 per cent each after the former announced the number of shares it will allot to shareholders of the latter on merger of the two. For the merger of ABNL with Grasim, each shareholder of ABNL will get three new equity shares of Grasim for every 10 equity shares held in ABNL which means a shareholder holding 100 shares in ANBL will receive 30 shares in Grasim. Grasim-Aditya Birla Nuvo merger ''on track'' 01 November, 2016 | BusinessLine. Product Number: 9B20N003. “The merger is creating a complex shareholding structure and is value disruptive for the retail shareholders,” Investment advisor S.P. Aditya Birla Nuvo Ltd (ABNL) will merge with Grasim Industries Ltd in a bid to unlock shareholder value and c;reate a $9 billion (Rs 59,766 crore) enterprise. ABFSL will be listed by May-June 2017, Mr. Birla said. Minority shareholders of billionaire Kumar Mangalam Birla-led Grasim Industries have approved its mega-merger with Aditya Birla Nuvo Ltd (ABNL) to c;reate a nearly Rs 60,000-crore diversified entity. The Aditya Birla Group is in the League of Fortune 500. The company has gone out of the way to explain the proposal to Investors even as there are … A part of this two-step restructuring may involve the merger of Grasim and parts of Aditya Birla Nuvo, which is likely to be followed by the hiving-off of the financial services business of AB Nuvo into a separate company. Aditya Birla Financial Services is currently a 100% subsidiary which houses the non-banking financial company, housing finance, asset management, general … The board of Grasim has also recommended sub-division of its equity shares of Rs.10 each into five equity shares of Rs.2 each. In May last year, Aditya Birla Nuvo announced merger of all its branded apparel businesses into one entity, Pantaloons Fashion & Retail now known as Aditya Birla Fashion and Retail. Mr. Sandeep Gurumurthi Group Head, Communication & Brand Share. 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