Calcutta, Nov. 9: McLeod Russel India Limited has approved the scheme of amalgamation of Williamson Tea Assam (WTA) with itself. The share swap ratio has been fixed at 3:1.

The swap ratio, subject to various approvals, means the shareholders of WTA will receive three shares of Rs 5 each in McLeod Russel India Limited for every one fully-paid-up share of Rs 10 held by them in WTA.

The BM Khaitan group had appointed ICICI Securities and PricewaterhouseCoopers (PwC) to work out the formalities of the amalgamation. The scheme has to be approved by the high courts of Guwahati as well as Calcutta. After the merger, Williamson Tea will cease to exist.

McLeod Russel recently concluded an open offer for Williamson Tea's minority shareholders, but managed to buy only around 22,000 shares (0.16 per cent).

The company had proposed to buy up to 2,83,5000 fully paid-up shares at Rs 145 each. The offer price of Rs 145 had been calculated based on the average price of last 26 weeks or the daily price of last two weeks, whichever was higher. With this, the Khaitans’ stake in Williamson Tea has gone up to 70.16 per cent.

The offer was scheduled to open on August 1. However, it was delayed pending a clearance from the Securities and Exchange Board of India. McLeod had also acquired 70 per cent of Borelli Tea Holdings Limited, the holding company of Williamson Tea Assam.

After the merger, McLeod Russel will become the largest tea plantation in the world and also the biggest quality tea exporter from Assam. The company had earlier said the merger would result in cost savings and sharing of debt between the two BM Khaitan group companies. MRIL has Rs 400 crore of debt, while WTA has none at all.

The Khaitans have decided to develop McLeod Russel as an agricultural company and are now preparing an “alternative crop strategy”, likely to be announced in April 2006.

The company is exploring various options. Deepak Khaitan, vice-chairman of McLeod Russel, had said the company was looking at bio-diesel, biomedicine, coffee, rice, wheat and soya and may acquire land in states outside Assam and Bengal.

The stock price of McLeod Russel closed at Rs 60.65 today, down 4.56 per cent from yesterday’s finish of Rs 63.55.