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'Very complex' merger cements Amarchand, Aditya Birla


Amarchand Mangaldas Mumbai has advised Aditya Birla Group in the series of mergers between Grasim Industries, Samruddhi Cements and UltraTech Cements, creating India's largest and the world's tenth largest cement manufacturer.

Amarchand Mumbai managing partner Cyril Shroff and corporate partner Nivedita Rao advised on two separate mergers, which saw Grasim's cement business first demerging to Aditya Birla-owned Samruddhi.

Samruddhi subsequently merged into sister company UltraTech to form one entity. UltraTech was formerly owned by L&T Cements.

Shroff said: "It was very, very complex – one of the most complicated transactions I've done."

"The merger will achieve the group's objective of consolidating its cement business into a single entity, thereby creating a platform that will help in pursuing aggressive growth going forward," said Aditya Birla Group's chairman Kumar Mangalam Birla in a press release.

Samruddhi shareholders will receive four shares of UltraTech for every seven shares held in Samruddhi. Ultra Tech will issue 149.5 million new shares.

The consolidation of two companies will come into effect on 1 July 2010 after the court-approved amalgamation scheme prescribed under the Company Act, 1956 is successfully undertaken.

It is understood that this transaction involves complex tax planning issues and requires post transaction securities to be listed in India and abroad.

Besides the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), Grasim is also listed on the Luxembourg Stock Exchange.

Amarchand enjoys a close relationship with the Aditya Birla companies, with Shroff sitting on Grasim's board of directors.

Photo by CraigCloutier

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