Merger of giants......

Reliance Industries Limited (RIL), India's largest private sector enterprise, declared merger ofReliance Petroleum Limited (RPL) with RIL. RIL will issue about 34-crore additional equity shares of market value of approximately Rs 11,000 crore. Earlier, RIL had sold 4% stake in RPL taking its stake down to 71%.

The value of RPL's assets has been put at Rs 21,000 crore by industry consultants and ChemSystems, a firm providing support in the field of petroleum, chemical, and petrochemical industries.

The merger would result in accretion of Rs 1,300 crore to RIL's net profit. Post-merger, the equity shareholding of the promoters in RIL would come down from the current 44% to 34%.

The merger would increase RIL's operational synergies and its cost efficiencies would optimise fiscal incentives, enhance financial strength and flexibility. It would also eliminate transfer pricing issues.

RIL's shareholding pattern:

Promoters: 49%

MF/UTI: 2.53%

FII: 15.52%

RPL's shareholding pattern:

Promoters: 75.28%