LONDON (ShareCast) - (Sharecast News) - Refractory products, systems and services supplier RHI Magnesita announced the proposed merger of its three Indian subsidiaries on Wednesday.
The FTSE 250 firm said the merger was designed to "optimally position" its operations in the strategically important Indian market, in order to capture growth opportunities more effectively and efficiently.

It said the boards of Orient Refractories, RHI India and RHI Clasil, at their respective meetings held on Tuesday, approved the proposal to merge RHI India and RHI Clasil with Orient Refractories, pursuant to a composite scheme of amalgamation.

Orient Refractories is listed on the Mumbai stock exchange.

On completion, RHI Magnesita said it would own around 70% of Orient Refractories, which would be renamed RHI Magnesita India.

The transaction was expected to be completed in the next nine to 12 months.

Orient Refractories is currently 70% owned by RHI Magnesita, and was described by the company as a "leading manufacturer and supplier" of special refractory products, systems and services for the steel industry.

RHI India, a wholly-owned RHI Magnesita subsidiary, is the Indian sales company of RHI Magnesita group, with a full range of refractories and related services sourced from various RHI Magnesita group entities to Indian customers.

The firm said RHI Clasil is 53.7% owned by RHI Magnesita, and is a manufacturer and supplier of mainly Alumina-based refractories for steel and cement.

RHI Magnesita said the key objective of the proposed scheme was to combine the strengths and competencies of all three companies, to establish one consolidated listed company that would be well-positioned to seize future growth opportunities and enhance shareholder value.

"The proposed merger of our Indian subsidiaries marks an important milestone towards expanding RHI Magnesita's market leadership in the refractory market in India," said chief executive officer Stefan Borgas.

"One strong, integrated organization and management will increase long term value for all stakeholders and efficiently combine resources and capabilities.

"This merger will significantly enhance the profile of RHI Magnesita in India and creates a stronger foundation to tap the immense growth potential we see in the Indian market."

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