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Shares of Deccan, UB Holdings surge on merger
By agencies
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Thursday, 27 December 2007, 16:49 IST
Mumbai: Shares of Vijay Mallya-led United Breweries Holdings and low-cost carrier Deccan Aviation on Thursday reacted positively to the news that both the companies would create a single corporate entity to cut down operational costs and increase profitability.
Deccan Aviation opened at $7.53, a jump of 2 per cent from yesterday's close. The scrip gained further momentum and witnessed an intra-day high of $7.87, a gain of around $0.5 and over 16.70 lakh shares got traded on Bombay Stock Exchange.
Shares of United Breweries Holdings opened firm at $28.12, up 3.73 percent over yesterday's closing price. The scrip later touched an intra-day high of $27.87, a gain of $1.75 and over 30,000 shares changed hands on the BSE.
The boards of the two private airlines at a joint meeting yesterday decided after management consulting firm Accenture in its report recommended their merger for greater operational and marketing synergies.
"Deccan and Kingfisher will be one company, and eligible to fly internationally in 2008," Mallya said adding that one of the key elements of the Accenture report is route rationalisation between the two airlines.
Liquor baron Mallya's UB Group had earlier this year acquired 46 percent stake in Deccan Aviation, becoming its single largest shareholder.
Mallya would be the Chairman and CEO of the merged entity, while Executive Chairman of Deccan, Captain G R Gopinath would be the Vice-Chairman.