The Hindu Business Line : IOC, IBP retail merger nearing completion

Kolkata, July 26 IndianOil will complete the merger of IBP’s petroleum retail business with itself beginning August 1. With this, the IBP division will be left with only explosive and cryogenic vessel manufacturing business. IOC is also planning an immediate investment of Rs 150-200 crore in automating IBP outlets.

Post merger, IOC will control over 16,455 outlets in the country. This will include over 3,500 IBP outlets which will henceforth display both the brands of IOC and IBP.

According to sources, the merger has also offered the opportunity of widening IOC sales network. While the 30 IBP divisional offices across the country are already closed down, IOC is opening 16 additional divisional offices in new locations over and above the existing 49.

“The merger has given us an opportunity to extend our network as well as further decentralisation of operations,” an IOC official said. “For example in West Bengal our operations will henceforth be divided in four divisions, up from the existing three divisions,” he added.

Interestingly, while the stage is already set for redeployment of field staff of IBP, IOC is facing problems in redeploying the senior and mid-level management of IBP.

“Unlike IOC which has an integrated chain of operations, IBP was engaged only in retailing the refined products.

“Accordingly, the merger leaves little option for IOC in absorbing the IBP employees in areas other than marketing. The problem is further compounded by the fact that IBP was comparatively top-heavy organisation,” a source said.

More Stories on : Mergers & Acquisitions | Retailing | Petroleum

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