Mumbai:Century Textiles and Industries Ltd is in talks to sell its paper unit to ITC Ltd, India’s largest cigarette maker, as part of an overhaul of businesses owned by the prominent Birla family, two people directly involved in the deal said.

The people said the planned sale was part of a broader move to streamline Birla family holdings and to transfer Century Textiles’ core businesses from the leadership of chairman Basant Kumar Birla—a 94-year-old patriarch of Indian business—to a younger generation.

As part of the plan, the group’s textile division will be merged with Aditya Birla Nuvo Ltd, controlled by the Aditya Birla Group and run by grandson Kumar Mangalam Birla, the people said.

Century Textiles’ cement unit, meanwhile, will merge with UltraTech Cement Ltd, also controlled by the Aditya Birla Group, the people said.

They said ITC was interested in the paper asset to diversify its operations beyond tobacco.

The people declined to be named as the deal talks are not yet public. Financial details were not immediately known.

ITC said in a statement it was not in any negotiations to buy Century Textiles’ paper unit.

Aditya Birla Nuvo said in a statement that reports about the company being in merger talks were not true. A spokeswoman for the Aditya Birla Group declined to comment.

Century Textiles’ officials were not reachable for comment.

News of the overhaul, first reported by Reuters, sent Century Textiles shares up over 8%, while Aditya Birla Nuvo rose as much as 3.3%.

Shares in other Basant Kumar Birla group companies also rose. Century Enka Ltd surged% while Kesoram Industries Ltd rose 5.1%.

After the deals, Century will be left with real estate assets and a chemicals business, the people said. It was unclear whether there were plans for these assets.

Axis Bank Ltd is advising Century Textiles on the restructuring process, the people said.

An Axis spokeswoman declined to comment. Reuters

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