UPL Limited’s Board approved a Composite Scheme of Arrangement to create a standalone, global, pure-play crop protection entity, UPL 2. The scheme involves three main steps: Amalgamation of UPL SAS (India business), Demerger of the India Crop Protection Business into UPL 2, and Amalgamation of UPL Cayman (International business) into UPL 2. This move aims to unlock shareholder value by separating the diversified agro/specialty chemical business (remaining in UPL 1) from the focused crop protection platform (UPL 2, which will be newly listed).
Board Approves Composite Scheme of Arrangement
The Board of Directors of UPL Limited approved a Composite Scheme of Arrangement designed to create a highly focused, independent, and unified global crop protection platform. The Scheme consolidates UPL’s India and international crop protection businesses into a new entity, tentatively named UPL 2. The existing listed entity, UPL 1, will continue as a diversified platform focusing on agriculture and specialty chemicals, incubating new verticals.
Key Transaction Steps
The reorganization is structured in three sequential steps:
- Merger 1: Amalgamation of UPL Sustainable Agri Solutions Limited (UPL SAS) into UPL 1.
- Demerger: Demerger of the India Crop Protection Business from UPL 1 into the entity that will become UPL 2.
- Merger 2: Amalgamation of UPL Cayman (holding the international business) into UPL 2.
UPL 2, post-completion, will be listed on the Indian stock exchanges, establishing the world’s second-largest listed pure-play crop protection platform. The appointed date for Merger 1 is set for April 1, 2026.
Strategic Rationale and Benefits
The primary objectives of this reorganization include:
- Unlocking Shareholder Value: Creating two distinct listed entities—UPL 1 (diversified) and UPL 2 (pure-play crop protection)—to enable clearer value discovery based on investor preference.
- Simplification and Efficiency: Consolidating crop protection operations to enhance synergies across manufacturing, research, and market access, leading to greater efficiency.
- Capital Flexibility: Allowing both UPL 1 and UPL 2 to raise capital independently and optimize their capital structures to pursue focused growth opportunities.
Management noted that this strategic reorganization will position UPL Global (UPL 2) to attract a wider pool of investors, strategic partners, and lenders to support sustained business growth.
Financial Implications and Ratios
The transaction involves no cash consideration. Share exchange ratios have been determined based on a joint valuation report prepared by PwC and Ernst & Young Merchant Banking Services LLP.
Key figures as of March 31, 2025 (audited standalone financials):
- UPL 1 Turnover: INR 53,313 Mn (Net Worth: INR 120,210 Mn).
- UPL SAS Turnover: INR 24,120 Mn (Net Worth: INR 22,016 Mn). The Demerged Undertaking turnover represents approximately 31.15% of UPL 1’s combined turnover.
- UPL Cayman Turnover: USD 4,187 Mn (Net Worth: USD 1,599 Mn).
Consideration Ratios
For Merger 1 (UPL SAS into UPL 1), shareholders of UPL SAS will receive 1,000 equity shares of UPL 1 (INR 2 each) for every 48 equity shares of UPL SAS (INR 10 each).
For Merger 2 (UPL Cayman into UPL 2), shareholders of UPL Cayman will receive 1,000 equity shares of UPL 2 (INR 2 each) for every 213 equity shares of UPL Cayman (USD 1 each).
For the Demerger, UPL 2 will allot 1 equity share of UPL 2 for every 1 equity share of UPL 1 held.
Shareholding Pattern Impact (Indicative for UPL 1 Post Merger 1)
The indicative shareholding pattern for UPL 1 following Merger 1 is projected as:
| Category | Pre-Scheme (%) | Post-Scheme (Indicative) (%) |
|---|---|---|
| Promoters | 33.51 | 33.09 |
| Public | 66.49 | 66.91 |
| Total | 100.00 | 100.00 |
The shareholding pattern of the newly listed entity, UPL 2, post Demerger and Merger 2, shows Promoters holding an indicative 71.56% and the Public holding 28.44%.
Leadership Outlook
Jai Shroff, Chairman & Group CEO, stated the reorganization strengthens the ability to build diversified businesses and drives incubation of next-generation ventures. Mike Frank, currently leading UPL Corp, will serve as the CEO of UPL Global (UPL 2).
Source: BSE
