The merger is expected to bring greater efficiency in cash management and unfettered access to cash flows generated by the combined business
DIL announced the merger of its subsidiary, Fermenta Biotech with DIL. Pursuant to applications made by DIL and FBL to the National Company Law Tribunal, Mumbai (NCLT) for approval of the scheme of amalgamation of FBL with DIL, the NCLT has approved the said merger vide its Order dated September 19, 2019.
As per the approved scheme of amalgamation, post merger, the name of the combined entity will be ‘FERMENTA BIOTECH LIMITED’. The merger took place purely in the interest of business growth, in order to combine resources of both companies, effectively manage operations, focus on business priorities and maximisation of stakeholders’ benefits.
The merger is also anticipated to bring greater efficiency in cash management and unfettered access to cash flows generated by the combined business. Further, cost savings are expected to flow from more focused operational efforts, standardisation of business processes and rationalisation of administrative expenses.
Commenting on the development, Krishna Datla, MD, Fermenta Biotech, said, “The amalgamation represents a major milestone for us in carrying forward our legacy of over six decades. It is expected to combine the synergies of both companies that will enhance our operational efficiencies. Further, it will enable us to focus our resources to bring in value-added formats in the nutraceutical ingredients space in order to diversify our product portfolio.”