Birla to divest 25% stake to 3M Corp

NEW DELHI, February 3: Yashovardhan Birla is selling 25 per cent of his total 32.7 per cent stake in Birla 3M Ltd to the company's foreign c...

NEW DELHI, February 3: Yashovardhan Birla is selling 25 per cent of his total 32.7 per cent stake in Birla 3M Ltd to the company’s foreign collaborator, the $14 billion 3M Corporation. The equity stake of 3M Corporation will increase to 76 per cent from the present level of 51 per cent while Birla’s stake will go down to 7.7 per cent in the equity capital of Rs 12.70 crore.

The price at which Birla is divesting his stake in favour of 3M Corporation could not be known but sources said that the foreign partner will pick up the stake at a premium. The company’s scrip is presently trading at Rs 185. 3M Corporation had picked up equity at a price of Rs 56 per share when it hiked its stake to 51 per cent.

Birla joins the ranks of a number of Indian promoters from well known business families who have let their foreign partners take full control of their joint venture companies. Other cases include Daewoo Motor Corporationin which Daewoo hiked its stake to 91 per cent and Honda-SIEL where Siddharth Shriram letHonda hike its stake to 90 per cent from 60%.

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Birla 3M’s proposal to give additional 25 per cent stake to 3M Corporation has been cleared by the Foreign Investment Promotion Board (FIPB).

Sources said that the proposal was accompanies by a board resolution of Birla 3M.

3M Corporation will purchase over 22 lakh equity shares held by Scimitar Investment and Trading Co and over six lakh equity shares from Shearson Investment and Trading Co, two closely held companies of the Yash Birla group, sources said.

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