APL Apollo Tubes Limited agreed to acquire a 44.18% stake in Apollo TriCoat Tubes Limited for INR 14.4 billion.
The Scheme is subject to receipt of approvals from the shareholders of Apollo TriCoat, shareholders of the APL Apollo Tubes as may be directed by the National Company Law Tribunal, BSE Limited, National Stock Exchange of India Limited and approval of other regulatory or statutory authorities as may be required. The Board of APL Apollo Tubes has approved the transaction based on reports furnished by the Audit Committee and the Independent Directors. The transaction is subject to approval from creditors of APL Apollo Tubes. The transaction is expected to close in the third quarter of financial year 2022 with the appointed date of merger being April 1, 2021. The transaction is EPS accretive with net profit increase by 13.5%, dilution of 9.7% and ROE accretive with 100% of Apollo TriCoat's profit to boost return profile and margin accretive with Apollo TriCoat's high margin products to lift APL Apollo Tubes's profitability. The amalgamation is a tax neutral transaction.
Fortress Capital Management Services Private Limited acted as fairness opinion provider to APL Apollo. KPMG Assurance and Consulting Services LLP acted as accountant to APL Apollo. SSPA & Co. Chartered Accountants acted as an independent valuer.