Crompton Greaves and Butterfly Gandhimathi Appliances have decided to continue as separate listed entities after public shareholders voted overwhelmingly against the merger proposal.

The voting results showed that over 96 per cent of public non-institutional shareholders of Butterfly voted against the resolution. Overall, the resolution received over 87 per cent of the votes in favour, including all categories of shareholders. In the case of public institutional shareholders, close to 63 per cent voted in favour while the remaining voted against.

Crompton Greaves, which holds a 75 per cent stake in Butterfly, said in a statement that the scheme will not be acted upon “due to non-receipt of the requisite approval from public shareholders of Butterfly.”

The company said that the development would not have any significant change in the growth strategy and “both the entities will continue to operate as separate individual listed entities.”

The decision to merge the two companies was taken in March this year, subject to shareholders’ approval. The merger, to be done through a share swap, was expected to accelerate and smoothen the synergies of the combined business of the entities.

‘No plans to reinitiate’

Crompton said that there were no plans to reinitiate the merger process and both companies, operating as distinct legal listed entities, “would continue to optimise various revenue and cost synergies by leveraging the distinctive strengths of each company within the kitchen appliances segment.”

The statement said that the strategy in kitchen appliances segment will encompass both the ‘Crompton’ and ‘Butterfly’ brands, with the expectation of delivering significant growth over the next few years.

“This initiative offers shareholders of both companies an opportunity to participate in the long-term growth and value creation,” it added.

Crompton is a market leader in the fans category, while Butterfly is known for its range of kitchen appliances, such as pressure cookers, food processors and gas stoves.

Shares of Crompton Greaves have fallen over 16 per cent over the last one year, while those of Butterfly Gandhimathi have fallen nearly 31 per cent.