The merger between the RIL [Get Quote] and RPL would enhance value for shareholders of both the companies, RIL Chairman Mukesh Ambani said in Mumbai on Monday.

"This merger follows Reliance Industries' philosophy of creating enduring value for all our shareholders. It is a significant step in our goal to be among the largest global corporations," Ambani said.

Board of directors of both the companies approved the merger of the two firms, creating one of the world's largest petrochemical entities. For every 16 share of RPL, one RIL share would be issued.

"The merger is about size and creating an integrated company. This has given it the ability to take on bigger projects. It is more about the size and growth and is not about tax (benefits) and others," RIL CFO Alok Agarwal said.

"The rationale of the merger is that it will unlock synergies from combined operations, besides having greater flexibility in operations. The merger would help the combined entity to process any kind of crude available in the market," Agarwal added.

The merged entity would have crude processing capacity of 1.24 million barrels per day (mbpd), the largest refining capacity at a single location in the world.

Post-merger, the promoter holding in RIL would come down to 47 per cent stake from 49 per cent now. RIL's a little more than 70 per cent holding in RPL will be cancelled.

Quoting analysts, Agarwal said the merger would be EPS accretive for RIL from the first year itself, but did not elaborate on that saying, "I am a little handicap on that."

"The merged entity will have more options to deploy capital," he said, adding that the timing of the merger could not have been better than this.

The merger would be a win-win for both the companies since it would reduce the earnings volatility for RPL shareholders and allow them to participate in the full energy chain of RIL.

RIL, in turn, would  also gain from reduced operating costs arising out of synergies of a combined operations, he added.