KOLKATA : The strategic business move by tobacco major, ITC Ltd, to merge with its speciality paperboard manufacturing subsidiary, ITC Bhadrachalam, has been approved by its shareholders.

More than 97 per cent of the ITC shareholders gave the merger plan the green signal at a poll conducted as per the order of the Kolkata High Court on December 7. The result of the poll was officially announced on Sunday. The poll was conducted after the EGM of the tobacco major at which chairman YC Deveshwar, justified the move by arguing that the merger would immensely benefit both companies.

The merger move is aimed at creating synergy with its current FMCG business as well as to expand the non-tobacco business of the city-based tobacco company in view of the sharply dwindling cigarette volumes in the country.

"Not only the EPS of ITC is expected to increase significantly, but the parent company will also get loss benefit that ITC Bhadrachalam had incurred in the past," Deveshwar told shareholders before the resolution for merger was put to vote. (PTI)