DEmerger-BAjaj - Demerger The Board of Directors of Bajaj...

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Unformatted text preview: Demerger The Board of Directors of Bajaj Auto Ltd agreed to a demerger on 17th May 2007. Under the scheme, BAL, the parent company, would be renamed as Bajaj Holdings and Investment Ltd ("BHIL") and the business was to be demerged into two new incorporated subsidiaries - Bajaj Auto Ltd ("BAL") and Bajaj Finserv Ltd ("BFL"). The auto and manufacturing businesses of the company would be held by BHIL while the wind power project, investments in the insurance companies and consumer finance would go to BFL. All the shareholders of the parent company became shareholders in the new companies and were issued shares of the two new companies in the ratio 1:1. Why the management went for merger (There view point)-They can focus & strengthen on these core businesses and competencies-The two new companies will be able to tap (on an arm’s length basis) into the cash pool of...
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This note was uploaded on 12/04/2011 for the course ECON 001 taught by Professor Tnaga during the Spring '11 term at Abant İzzet Baysal University.

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DEmerger-BAjaj - Demerger The Board of Directors of Bajaj...

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