Shares of JK Tyre and Industries Ltd were trading in the green and 2% higher on 17 September after the company board of directors approved the merger of Cavendish Industries with the company. 

The merger has been approved to increase the company’s operational efficiency, the merger will result in a share transfer. 

According to the firm, for every 100 shares of Cavendish held, shareholders will receive 92 shares of JK Tyre. According to JK Tyre, the combination will increase shareholder value, lower costs, combine the sales and distribution networks, and create operational synergies.

As per JK Tyre, both companies are in a similar line of business, and the amalgamation will lead to all the connected businesses being under one listed company. After the scheme, the promoter stake significantly decreases to 49.31%, reflecting a small change in the shareholding pattern. 

Cavendish Industries, a Kesoram Industries business, was purchased by JK Tyre & Industries for Rs 2,195 crore in order to strengthen its position in the truck and bus radial category.

However, at 12:49 pm, the shares of JK Tyre shed all their early and were trading 1.30% lower at Rs 436.60 on NSE.

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