A consortium led by the Gujarat government-owned Gujarat State Petroleum Corporation (GSPC) said on Wednesday that it has acquired a controlling 65.12% stake in Gujarat Gas Company Ltd (GGCL), a subsidiary of BG Group, for about Rs. 2,464 crore.
GGCL is India's largest city gas distribution company in the private sector, with close to 350,000 consumers in south Gujarat.
The company supplies gas to industrial units in Surat and Ankleshwar and Bharuch and runs a network of CNG stations to cater to gas-based vehicles in the area.GSPC and BG Group, earlier called British Gas, were in talks for the deal since early this year.
The acquisition price is significantly below the market price of Gujarat Gas shares that closed at Rs. 336.70 on Wednesday, down Rs. 7.40 or 2.15% below the previous close.
The acquisition is being made at Rs. 295 per share and a newly formed GSPC Group arm Gujarat Distribution Networks Ltd (GDNL) will conduct the deal.
The acquisition is subject to the customary regulatory approvals and is expected to close after a mandatory open offer to minority shareholders under the Takeover Code. It would also need to be approved by the Competition Commission and the Reserve Bank.
"With this acquisition, we will enhance GSPC group's presence in the state of Gujarat. The acquisition is in the long term interests of the industrial and retail customers of Gujarat," said Tapan Ray, managing director of GSPC.
Several corporate groups including Adani and Torrent had shown interest in acquiring a controlling stake in GGCL but failed to submit final bids.
GSPC's retail arm GSPC Gas supplies piped gas to homes and industrial gas to factories, and runs CNG stations in Gujarat.