FFBL shareholders to get one FFCL share for 4.29 shares held in merger deal

Fauji Fertilizer Bin Qasim (FFBL) will merge into Fauji Fertilizer Company (FFCL) through amalgamation against a consideration of approximately 150.87 million FFCL shares.

FFBL shareholders (excluding FFCL itself) will get one FFCL share for every 4.29 FFBL shares. FFBL will be dissolved without winding up and delisted from the PSX.

FFCL holds a 49.9% stake in FFBL, subjecting it to double taxation on dividend income. Analysts said a merger would eliminate this issue and generate significant synergies. The combined entity will lead the market with 43% share in urea and 60% share of urea market.

Presently, FFCL has an annual urea capacity of 2.04 million tonnes, while FFBL’s capacities are 0.55 million tonnes of urea and 0.65 million tonnes of DAP.

Post-merger, the total capacity is expected to be 2.60 million tonnes of urea and 0.65 million tonnes of DAP.

FFBL has 1,291 million outstanding shares, while FFC has 1,272 million.

Fauji Fertilizer Company posted a net profit of PKR 8.22 billion, while Fauji Fertilizer Bin Qasim posted a net profit of PKR 15.9 billion for the six months ended June 30, 2024.