Mumbai: The board of Indian construction firm Jaiprakash Associates has approved the acquisition of its unit Jaypee Hotels, the group said in a statement to the stock exchange.
Under the absorption scheme, Jaypee shareholders will get one share in Jaiprakash Associates for every share held. The merger will be effective retrospectively from 1 April, 2008.
Jaiprakash Associates held 72.18% in the hotel unit as on 30 September.
Ahead of the announcement, Jaypee Hotels shares ended 4.56% up at Rs84.85 in a weak Mumbai market. Shares in Jaiprakash Associates, which has a market cap of $2.3 billion, closed down 2% at Rs87.40.