Business Daily from THE HINDU group of publications
Saturday, Apr 28, 2007
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Business Daily from THE HINDU group of publications Saturday, Apr 28, 2007 ePaper |
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Mergers & Acquisitions Industry & Economy - Petroleum IOC-IBP merger plan may be cleared soon Pratim Ranjan Bose
Thirty divisional offices of IBP are likely to be wound up and the infrastructure used for some other purposes.
Kolkata April 27 The Union Ministry of Company Affairs may approve the merger of IBP Ltd with Indian Oil in the next few days. The merger, which was expected to be through in 2006-07, was delayed by some last-minute complaints brought before the Ministry by a few investors. According to sources, the Ministry has completed the enquiry based on the investors' complaints and has favoured the merger proposal. When contacted, Mr V.C. Agarwal, Director HR of IOC and Managing Director of IBP, told Business Line that the merger proposal was expected to be cleared shortly. "We have received feedback that the merger proposal is in an advanced stage of consideration and a communication in this regard is expected in the next couple of days," he said adding that once cleared IBP will be merged with IOC at the earliest. IOC has taken steps towards merging the operations of both companies. While the LPG business was merged during the last fiscal, the business of both companies are integrated beginning this fiscal. To begin with, IBP has started sharing the supply logistics of IOC. Also IBP lube blending capacities are used by both companies.
Petrol outlets
Thirty divisional offices of IBP are likely to be wound up and the infrastructure used for some other purposes. "We will retain the IBP brand for petroleum retailing. We have already made IOC branded fuels available in IBP outlets. Post-merger the existing IBP outlets (3,500) will sport the logos of both the companies," Mr Agarwal said. The merged entity will have roughly 16,000 outlets. However, unlike the Assam Oil Division (AOD), which continued as a division of IOC post merger, IBP will be completely merged with the parent. Meanwhile a decision is awaited on retention of IBP lubricant brand IBP Red. "We feel that Servo of IOC is a comparatively stronger lube brand. Accordingly we are yet to decide on retention of IBP Red," he said. IOC acquired the Union Government's 33.58 per cent stake in IBP in 2002. Post-merger the Government shareholding in IOC is expected to come down marginally from 82.03 per cent to 80.35 per cent.
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