Aditya Birla Chemicals, Grasim Gain on Merger Nod

Shares in Aditya Birla Chemicals (ABCIL) and Grasim Industries gained on Thursday after their boards approved merger of ABCIL with Grasim Industries.. ABCIL surged over 10 per cent to an intraday high of Rs 248, while Grasim Industries gained over 2 per cent to a day high of Rs 3,931.50 on Thursday.. Under this merger, shareholders of ABCIL will get one share of Grasim Industries for every 16 shares held. This transaction values ABCIL at 6.2 times its EV/EBITDA (Enterprise Value/ Gross Profit).. Aditya Birla Chemicals manufactures bulk and specialty chemicals and viscose filament yarn, while Grasim Industries is the world's largest producer of viscose staple fibre (VSF). Cement and VSF contributes around 90 per cent of Grasim's revenue.. In a filing to exchanges Grasim Industries said this merger will create operational efficiencies, cost competitiveness and financial synergies to achieve optimum growth in future.. Grasim Industries believes this merger will enable geographical diversification through addition of ABCIL's three manufacturing facilities spread across the country. With this merger, market share of Grasim Industries in caustic soda will increase to 22 per cent from 13 per cent now.. After the merger, promoter-holding in Grasim Industries will increase to 31.1 per cent from 30.7 per cent. Its management believes this merger will be EPS accretive in one year.. Shares in ABCIL ended 4.4 per cent higher at Rs 235 and Grasim Industries closed down 0.44 per cent at 3,827.05 apiece.

Aditya Birla Chemicals, Grasim Gain on Merger Nod

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