Indian Hotels Company Ltd (IHCL), which is owned by the Tata Group, announced on Monday plans to merge with Oriental Hotels Ltd through a share exchange deal. The boards of directors of both companies have approved the Scheme of Arrangement for this merger to take place.
Under the proposed Scheme of Arrangement, the share exchange ratio is 25 IHCL shares for every 117 OHL shares, and the transaction completion is scheduled for the second half of the financial year 2028. Puneet Khatwal, Managing Director and CEO of IHCL, stated that this merger is approved as part of the company's 'Accelerate 2030' strategy, aimed at enhancing value, simplifying the group's ownership structure, and unlocking the full potential of the OHL portfolio, including iconic properties such as Taj Coromandel in Chennai, Taj Fisherman's Cove Resort & Spa in Chennai, and Taj Malabar Resort & Spa in Cochin.
Oriental Hotels is an affiliate of IHCL and possesses a portfolio of seven hotels with a total of 825 rooms. This portfolio includes owned properties like Taj Coromandel in Chennai, Taj Fisherman's Cove Resort & Spa in Chennai, and Gateway Coonoor, as well as long-term leased properties: Taj Malabar Resort & Spa in Cochin, Vivanta Coimbatore, Vivanta Mangalore, and Gateway Madurai.
Furthermore, OHL has strategic investments in several hospitality companies within the IHCL group both in India and abroad, including St. James Court, TAL Hotels and Resorts Ltd, Lanka Island Resorts Ltd, Taj Madurai Ltd, and Taj Karnataka Hotels and Resorts Ltd.
Ankur Dalvi, Executive Vice President and CFO of IHCL, clarified that the Scheme of Arrangement involves the exchange of 25 IHCL shares for 117 OHL shares and is a share swap deal. The transaction is slated for completion in the second half of the financial year 2028, provided the effective date falls on April 1, 2027. He also noted that the Scheme is subject to obtaining necessary approvals and sanctions.
According to Dalvi, the merger will further simplify the group's ownership structure by increasing IHCL's direct stake in several entities, leading to the creation of two new operating subsidiaries. This, in turn, will optimize overhead costs, improve operational efficiency, and support the 'Accelerate 2030' goals.
Pramod Ranjan, Managing Director and CEO of Oriental Hotels Ltd, emphasized that the integration of OHL with IHCL will bring substantial value to OHL shareholders by giving them the opportunity to participate directly in IHCL's growth.