Grasim Industries said on Tuesday that the board of its subsidiary UltraTech Cement Ltd has given in-principle approval to a proposal to absorb group firm Samruddhi Cement.
"The board has approved the consolidation. We are appointing valuers (valuators) to tell us the way forward," group chairman Kumar Mangalam Birla said, adding that the process would be completed in seven to eight months.
Earlier, UltraTech had said in a statement that it found the Samruddhi proposal "attractive", and also set up a committee to evaluate it. The committee was expected to get back to the board with its recommendations by the first week of November, Birla said.
Last week Grasim Industries, the holding company, decided to hive off its cement business into unit Samruddhi Cement in a cashless transaction, and said it would merge this with UltraTech over the next eight to ten months
Grasim will transfer its cement businesses, including related businesses / investments but excluding its investment in UltraTech, to Samruddhi. In consideration, Samruddhi will issue one equity share of Rs5 face value each credited as fully paid-up to the shareholders of Grasim for every equity share they hold in Grasim as of the record date.
Upon effectiveness of the scheme, Samruddhi will be held approximately 65 per cent by Grasim and the balance 35 per cent will be held directly by the shareholders of Grasim. Samruddhi is proposed to be listed, the release said.