Through an exchange filing, Crompton and Butterfly, today, announced a proposed scheme of amalgamation of Butterfly with Crompton (“Merger”). Upon Merger, the public shareholders of Butterfly as on the record date will receive 22 equity shares of Crompton for every 5 equity shares held by them in Butterfly, as a consideration for the Merger. Post-Merger, the public shareholders of Butterfly will hold ~3.0% stake in the combined entity.
The scheme is subject to the necessary statutory and regulatory approvals including approval of the stock exchanges, SEBI, the respective shareholders and creditors of each of the companies and NCLT (Mumbai and Chennai benches).
Strategic Rationale for the Merger The Merger will unlock various revenue and cost synergies, achieve economies of scale by pooling the combined resources and provide an impetus to grow across all parts of India.
The combined entity is expected to benefit from pooling of human capital that has diverse skills, talent, and vast experience to compete in an increasingly competitive industry.
Additionally, it will enable more efficient allocation of capital and result in simplification of the corporate structure.
Shantanu Khosla, Managing Director – Crompton said “The merger is an important strategic step in the Company’s journey and will help unlock the full potential of the combined businesses. It will enable a faster execution of our Go-To Market strategy and enable greater focus on product innovation. We are confident that this will create significant value for all of our stakeholders.”
Rangarajan Sriram, Managing Director at Butterfly said “The proposed merger will enable Butterfly to better leverage the pan-India reach of Crompton, integrate more closely with Crompton’s consumer appliances business and tap cross-selling opportunities. It will also provide greater avenues for growth and development of our people.”
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