1. HR aspects. 2. Structure aspects. 3. Financial parameters. 4. Marketing and branding aspect. 5. International business. 6. IT aspects. 7.

Competitor and market share basis.

Assignment

Of

Current Affairs

Merger and Acquisition

Submitted To- Submitted By-

Mr. Anoop Mohanty Vir Angad Singh

RS38E1A23

B.com(prof.) 6th sem

Reliance Industries Limited

Reliance Industries Limited (RIL) is India's largest private sector company on all major financial
parameters with a turnover of Rs.1,39,269 crore (US$ 34.7 billion), cash profit of Rs. 25,205
crore (US$ 6.3 billion), net profit (excluding exceptional income) of Rs. 15,261 crore (US$ 3.8
billion) and net worth of Rs. 81,449 crore (US$ 20.3 billion) as of March 31, 2008. RIL is the
first private sector company from India to feature in the Fortune Global 500 list of 'World's
Largest Corporations' and ranks 103rd amongst the world's Top 200 companies in terms of
profits. RIL is amongst the 30 fastest climbers ranked by Fortune. RIL features in the Forbes
Global list of the world's 400 best big companies and in the FT Global 500 list of the world's
largest companies. RIL ranks amongst the 'Worlds 25 Most Innovative Companies' as per a list
compiled by the US financial publication-Business Week in collaboration with the Boston
Consulting Group.

Reliance Petroleum Limited

Reliance Petroleum Limited (RPL) is a subsidiary of Reliance Industries Limited. RPL is setting
up a greenfield petroleum refinery and polypropylene plant in a Special Economic Zone at
Jamnagar in Gujarat. With an annual crude processing capacity of 580,000 barrels per stream day
(BPSD), RPL will be the sixth largest refinery in the world.

RPL is a significant global player in Refining and Petrochemicals - contribute 98% to revenue

Merger
Reliance Petroleum merger with Reliance Industries has been approved in Mumbai high court
and after the ruling reliance industries has issued a statement saying that they have set September
29th 2009 as the date set for amalgamation, which means, those who hold reliance petroleum
shares as of that date will be eligible for the swap of Reliance industries, all the shares are
swapping in the ration of 16 reliance petroleum stock for only 1 share of reliance industries
stock. They have submitted to BSE note on the Scheme of Amalgamation of Reliance Petroleum
Ltd with Reliance Industries Ltd.
On Mumbai 2 march, The board of directors of Reliance Industries headed by Mukesh Ambani
on Monday agreed to merge with its refinery subsidiary, the Reliance Petroleum Ltd. (RPL).Both
the companies, in their respective filings, agreed on one equity share for the RPL shareholders
and 16 for the RIL shareholders. This development has resulted in formation of one of the largest
refineries in the world. The merger, which would take effect from April 1, 2009, would also
make the RIL one of the top 50 companies in the world on profitability basis. The RIL had
earlier announced to buy 5 % stake in Chevron Energy and latter decided to quit the RPL. The
RIL had bought 22.50 crore equity shares, which was 5 % of RPL''s equity from Chevron. This
would raise its stake in the company to 75.38 %.

As Chairman and Managing Director, Reliance Industries Ltd Mr. Mukesh Ambani said that
“This merger follows Reliance Industries’s beliefs of creating long-term value for all our
stakeholders. It is a significant step in our goal to be among the largest global corporations.”

RIL & RPL MERGER

• Merger is India’s largest ever

• RPL shareholders to receive 1 share of RIL for every 16 shares of RPL

• RIL to be a top 10 private sector refining company globally

• RIL to become the world’s largest producer of Ultra Clean Fuels at single location

• Merger to unlock greater efficiency from scale and synergies

• Merger to be EPS (earning per share) accretive

• RIL to have 3.7 million shareholders

Merger Benefits

The merger will unlock significant operational and financial synergies that exist between RIL
and RPL. It creates a platform for value-enhancing growth and reinforces RIL’s position as an
integrated global energy company. The merger will enhance value for shareholders of both
companies. The merger is EPS accretive for RIL. Through this merger, RIL consolidates a
world-class, complex refinery with minimal residual project risk, while complementing RIL’s
product range. There will be further gains from reduced operating costs arising from synergies
of a combined operation.

The merger is expected to reduce the earnings volatility for RPL shareholders and allows them to
participate in the full energy value chain of RIL.

The merger will result in RIL:

• Operating two of the world’s largest, most complex refineries.

• Owning 1.24 million barrels per day (MBPD) of crude processing capacity, the largest refining
capacity at any single location in the world.

• Emerging as the world’s 5th largest producer of Polypropylene.

Merger Details:

The merger between RIL and RPL was proposed merger. RPL shareholders will receive 1 share
of RIL for every 16 RPL shares held by them. The appointed date of merger of RPL with RIL is
1st April 2008.RIL will cancel its holding in RPL. Based on the recommended merger ratio, RIL
will issue 6.92 crore new equity shares to the existing shareholders of RPL. This will result in a
4.4% increase in equity base from Rs 1,574 crore to Rs 1,643 crore. Consequently, the promoter
holding in RIL will reduce from 49.0% to 47.0%

Advisors to the merger are as follows:

Following are the advisors of the merger of RIL and RPL.

Thru these advisor s merger of RIL & RPL was successfully happened

Valuation Advisors: Ernst & Young Pvt. Ltd. and Morgan Stanley India Co. Pvt. Ltd.

Transaction Advisors: JM Financial Consultants Pvt. Ltd. and Kotak Mahindra Capital Co Ltd.
Fairness Opinion: DSP Merrill Lynch Ltd. (for RIL) and Citigroup Global Markets India Pvt.
Ltd (for RPL)

Legal Advisor: Amarchand & Mangaldas & Suresh A. Shroff & Co.

Tax Advisor: Price Waterhouse and Coopers Pvt. Ltd.

The top competitors of Reliance are:

1) Bharat Petroleum Corporation Limited

2) Indian Oil Corporation Limited

3) Tata Group

International aspects
India’s Reliance Industries Limited and UK-based BP, one of the world’s largest energy
companies, having a partnership under which BP will take a 30 per cent stake in 23 oil and gas
production sharing contracts that Reliance operates in India

Market Share
The market share of Reliance Industries Limited was differing from 980 to 990. The market
condition of RIL was very good as it takeover RPL with it.