The Government had announced in this year’s Budget its intention to strengthen its oil PSUs through a mega merger so that they could ostensibly compete with some of the largest global petroleum companies.
Such a merger would ostensibly increase their capacity in terms of risk taking, availing economies of scale, creating better value for the stakeholders, improving efficiency etc.
More recently, it appears that the acquisition of Oil Marketing Company (OMC) HPCL is being considered by the flagship upstream PSU ONGC. This might be the easiest of the possible combinations given the Government’s share in HPCL is just a tad over 50 percent and the firm was earlier considered for divestment (before the Supreme Court put a spanner in the works).Read more
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