The board of the Rs 500 crore-plus Exide Industries will meet on July 13 to formally adopt the merger proposal, according to a notice issued to the Bombay Stock Exchange by the company on Friday.

The decision to merge the two companies comes after a series of difficult years for the storage battery industry, which has been plagued, in turn, by adverse excise imposition, and later, by the slow growth in the power and other infrastructure sector, where the storage batteries are in maximum use. Storage batteries are largely used in the transmission industry.

Exide Products, the storage-battery company, has not however performed badly throughout the mid-nineties. Its sales grew in the year ended March 31, 1996 from Rs 64.78 crore to Rs85.86 crore, and its net profit rose slightly to Rs 0.16 crore against Rs 0.07 crore last year. The earning per share of the company continued to be attractive at Rs 10.67 because of a very low equity base of barely Rs 0.15 crore.

The equity base of Exide Industries, of Rs 28.83 crore, will therefore hardly be altered. The company's reserves stand at Rs 158.97 crore, while that of Exide Products is Rs 4.55 crore. Exide Industries' debt position stands at Rs 178.02 crore, while the book value stands at Rs 52.25 crore.

Exide is the market leader in the automotive batteries segment, and has performed well despite a slowdown in the automotive sector. Its operating profit has gone up from Rs 43.24 crore to Rs 69.80 crore, profit before tax rose from Rs 21.86 crore to Rs 36.04 crore and earning per share climbed from Rs 8.23 to Rs 10.73.

The company managed to skirt the general slowdown in the automotive segment by going for the replacement segment, which grew in the year ended March 31 1997 by a whopping 37per cent. The company has restructured itself into several Strategic Business Units (SBUs) which has provided substantial focus to certain divisions, such as the industrial batteries segment.