The Board of Directors of Reliance Industries [Get Quote] on Monday approved a scheme of amalgamation of its subsidiary Reliance Petroleum [Get Quote] with the parent company under the provisions of Sections 391 to 394 of the Companies Act, 1956.

The scheme will be subject to necessary approvals of shareholders and creditors and sanctions of the high court of judicature at Mumbai and the Gujarat high court.

Once the merger is completed, RPL shareholders will receive one fully paid equity share of Rs 10 each of the company for every 16 fully paid equity shares of Rs 10 each of RPL held by them.

While announcing the merger, Mukesh Ambani, chairman and managing director of Reliance Industries said, "The merger follows enduring philosophy of creating shareholder value."

Highlights:

• RIL-RPL Merger: Swap ratio at 16:1.
• RIL to extinguish Treasury Stock.
• Merger to be effective from April 1, 2008.
• RIL to issue 6.92 cr shares to RPL shareholders.
• Merger to give no tax relief for RIL.
• Merger to be EPS positive.