Indian Oil Corporation on Wednesday said it would merge with itself its over 53 per cent subsidiary IBP.

The IOC board, which met in New Delhi, has in-principle approved and recommended to the government the merger of IBP with IOC, M S Ramachandran, chairman, IOC, told PTI.

"We are going to merge it by offering the existing shareholders of IBP shares of IOC in a ratio that will be decided after government's approval of the proposal," he said.

The government approval is required because its (government's) equity in IOC would be marginally diluted due to the share-swap.

"As per our calculations, offering 46.42 per cent of IBP shareholders IOC's shares will dilute the government equity very marginally by about 1 to 2 per cent," he said.

Ramachandran said IBP was being merged with IOC as both market identical products in similar markets, and it would be much better to have both companies under one umbrella instead of running them separately.

He, however, indicated that IBP would be retained as a separate brand as it had definite advantages.