Demerger plan for the hotel business of ITC gets CCI approval

29 May 2024 , 11:24 AM

On Tuesday, the Competition Commission of India (CCI) authorised ITC Ltd’s demerger of its hotel business into a separate firm. Following the demerger, shares of ITC Hotels Ltd, a new corporation, will be listed on the public exchanges. The proposed merger involves the demerger of the demerged entity into ITC’s wholly-owned newly established subsidiary, ITC Hotels.

Following the demerger, ITC Hotels’ shares will be listed. According to a notification on the CCI website, ITC will retain a 40% stake, with the remaining 60% owned by the conglomerate’s shareholders.

In India, ITC operates a diverse range of operations, including FMCG, hotels, paperboards, paper and packaging, and agribusiness.

According to ITC, the proposed merger is simply an internal reorganisation exercise that will have no impact on market dynamics.

In July 2023, leading conglomerate ITC announced that it will demerge its hotel unit by forming a wholly-owned subsidiary, ITC Hotels Ltd.

The company’s board has also approved the formation of ITC Hotels Ltd, a wholly-owned subsidiary that would manage the company’s hotels and hospitality operations, it said.

ITC Hotels, India’s premier luxury hotel company, opened in 1975 and now operates over 115 properties in 80+ destinations under six distinct brands.

ITC Limited is an Indian multinational with its headquarters in Kolkata. It operates in six business segments: FMCG, hotels, agribusiness, information technology, paper products, and packaging. Tobacco goods provide for the vast majority of business revenues.

At around 11.21 AM, ITC was trading 0.23% lower at ₹428, against the previous close of ₹429 on NSE. The counter touched an intraday high and low of ₹431.80, and ₹425.50, respectively.

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