The board of directors of Godrej Consumer Products has finally given its nod for the amalgamation of two group entities viz. Godrej ConsumerBiz and Godrej Hygiene Care with itself.

Godrej Hygience Care is a 100% subsidiary of Godrej Industries, while Godrej ConsumerBiz is a 100% subsidiary of Godrej & Boyce Manufacturing Co.

Following the merger, Godrej Consumer Products will directly hold a 49% stake in GSL, which will enable consolidation of its FMCG businesses.

The two firms, Godrej ConsumerBiz and Godrej Hygiene Care, currently holds 29% and 20% in Godrej Sara Lee (GSL) respectively, which is a joint venture between the Godrej Group and US-based Sara Lee Corp.

The board has fixed date of the merger of the company on June 1, 2009.

As a result of the merger, the assets and liabilities of the two firms will be transferred to Godrej Consumer Products.

The company stated in a release that Godrej Consumer Products will issue 10 shares to the shareholders of Godrej ConsumerBiz for every 11 shares held.

In addition, the share swap ratio will remain the same for Godrej Hygiene Care.

Further post-merger, the promoter stake in Godrej Consumer will increase from 69.73% to 74.77% after the merger.

On wake of positive announcement, the shares of the company jumped and touched intraday high of Rs 180. Presently it is trading at Rs 176, up 7% compared to its previous close.