Mumbai, March 11. (PTI): In line with market expectations, the Board of the Mukesh Ambani-led Reliance Industries' on Saturday cleared the merger of IPCL with itself at a share swap ratio of 1:5.

The appointed date of the merger of IPCL with RIL was April 1, a RIL press release said.

The Reliance Industries Board also approved an interim dividend of Rs 11 per share totalling Rs 1,748 crore including dividend tax.

Likewise, the IPCL Board approved the interim dividend of Rs six per share amounting to Rs 206 crore including dividend tax.

Following the merger, the share capital of RIL would increase from Rs 1,393.5 crore to Rs 1,453.6 crore.

RIL is the country's largest private sector company with a leadership position in the petrochemicals industry, while IPCL is India's second largest company in that sector.

As part of the disinvestment programme of the Government, RIL had acquired 26 per cent equity in IPCL in 2002 and thereafter increased its holding to 46 per cent through an open offer.

RIL's associate companies hold 47.3 per cent of IPCL's equity share capital, the release said, adding these shares would be exchanged for equity share of RIL having current market value of over Rs 3,700 crore.

This will constitute two per cent of their enhanced equity share capital of RIL and associates would hold the share for the benefit of all shareholders of RIL and monetise the economic value at an appropriate time in future.

These shares could be offered to financial or strategic investors in domestic or international markets.

The proposed merger is in line with the industry trend, which would help in achieving scale, size, integration and enhanced financial strength along with the flexibility to pursue future growth opportunities, both organic and inorganic and within and outside India.

Commenting on the merger, RIL Chairman and Managing Director Mukesh Ambani said: "With this merger, I am happy to welcome all IPCL shareholders to RIL family."

This merger will create a value to synergise and scale that shall enhance the sustainable competitive advantages of RIL.

"This merger will be earnings accretive for the shareholders of RIL and shall provide shareholders of IPCL an opportunity to participate in RIL's diversified business portfolio," Ambani said.

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