Dilip Piramal has merged his marketing company, Blow Plast Ltd., into the manufacturing arm VIP Industries, as per a report in Hindustan Times. The boards of the two companies approved the merger and a share swap ratio of 1:1 - Investors will receive one equity share of VIP for every share held in Blow Plast. The promoters will have a 52% stake in the merged entity. The promoters held 60% stake in Blow Plast, and 10% in VIP. Blow Plast held 48% in VIP.
In the past, Blow Plast, the marketing arm, marketted other products like toys, furniture, which contributed up to 30% of its sales. Over the last few years, it has exited these products and only markets luggage now, and hence the merger.
The combined entity will be an integrated luggage company with a presence across the value chain, benefiting from synergies and scale. The merged entity will have sales of Rs. 500 crore. Th emerger will provide the advantages o f optimization of facilities and integration of operations, leading to reduced costs.
In the Rs. 9,000 crore organized luggage market, VIP has a market of around 55%, Samsonite enjoys 17-18%, Aristocrat 15% and Safari around 13-14%.
13-May-06 
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