Hindalco-Indal merger put off
To be delisted from the bourses after the completion of the open offer
After the recent announcement of group restructuring exercise to consolidate its non-ferrous metals business under Hindalco, The AV Birla group, is unlikely to merge Indal with Hindalco in the near term. On the contrary, Indal will remain a wholly owned subsidiary of Hindalco. It will alos be delisted from the bourses after the completion of the open offer to buy all outstanding shares from the market.
The reason, according to Sumant Sinha, president and head of corporate finance of the AV Birla group, was the high stamp duty charges that Indal's merger with Hindalco would attract. He said, ''We are not considering the option of merging Indal with Hindalco, as we found that the costs of merger outweigh its benefits.This is primarily because Indal's mines, plants and other assets are spread all over the country and hence would attract a heavy stamp duty if a merger takes place.'' The estimated cost of the merger was around Rs 1 billion, he added.
Indal is the group's downstream aluminium-producing arm that Hindalco acquired from Canadian major Alcan in March 2000. The company's strength is alumina chemicals and downstream products that complement Hindalco's dominance in primary metals.
