UPL drops and Advanta gains after board approval for merger of latter with former

UPL dropped 0.92% to Rs 453.80 and Advanta gained 4.01% to Rs 495.25 at 11:00 IST on BSE after the board of directors of UPL and Advanta today, 23 November 2015, unanimously approved Advanta's merger with UPL.

UPL and Advanta, both, made announcement of merger during market hours today, 23 November 2015.

Meanwhile, the BSE Sensex was down 5.04 points, or 0.02%, to 25,863.45.

Advanta's merger with UPL is subject to necessary approvals. The merger will be effected through a court approved scheme of amalgamation. The appointed date of merger is 1 April 2015. As per the scheme of merger, Advanta shareholders will be issued 1 share of UPL for every share held in Advanta. Three optionally redeemable convertible preference shares in UPL will be issued for 1 share of resident shareholders of Advanta. Three compulsorily convertible preference shares in UPL will be issued for 1 share of non-resident shareholders of Advanta. On conversion, 471 preference shares to be converted into 10 equity shares of UPL. Advanta global depository receipt (GDR) holders holding 1 GDR will be issued 1.06 GDR in UPL. The shares by UPL in Advanta will be cancelled as part of the scheme. Based on the recommended swap ratio, UPL to issue 7.74 crore new equity shares and 18.18 crore new preference shares based on Advanta's shareholding pattern as on 20 November 2015 (assuming full conversion of FCCB's and exercising of all ESOP's).

The merger will enhance presence across agri-inputs value chain, increase geographical reach and enhance market penetration. The merger will be growth accretive It will improve customer access and annual cost savings will be Rs 90 crore is envisaged.

Advanta's consolidated net profit rose 135.6% to Rs 44.58 crore on 24% decline in net sales to Rs 285.89 crore in Q3 September 2015 over Q3 September 2014.

UPL's consolidated net profit rose 11.5% to Rs 185.21 crore on 4.2% rise in net sales to Rs 2728.53 crore in Q2 September 2015 over Q2 September 2014.

UPL is a agrochemical company.

Advanta is a member of the United Phosphorous group of companies. Advanta is a seeds company with products that improve the productivity and profitability of farmers.

As per the shareholding pattern as at 30 September 2015, UPL holds 46.47% stake in Advanta.

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