Ambani family control is weakened by the merger

Reliance Petroleum (RPL) and Reliance Industries (RIL) merger creates India's first fully integrated energy company, with a market value of about $11bn.

The combined strength will give it the ability to raise capital on the international markets to aggressively bid against foreign companies for assets being privatised by the Indian government.

RIL is India's largest petrochemical firm, contributing about 3% of India's gross domestic product, and the country's largest exporter while RPL operates the country's largest petroleum refinery.

The company is expected to be rated amongst the top 30 energy company in the world by profits.

Privatisation bids

The enlarged group's activities will be focused on exploration and refining, but to take advantage of the deregulation of India's petroleum market, it needs to acquire a distribution arm.

In February, Reliance failed in its bid for Indo-Burma Petroleum.

The company is now expected to make substantial offers for Bharat Petroleum or Hindustan Petroleum when the government brings them to market later this year.

Overwhelming approval

"The resolution was passed with an overwhelming majority representing 99.99% in value of members present and voting," RPL said in a statement after the merger vote.

RIL shareholders had approved the merger last week.

Founder and chairman Dhirubhai Ambani controls the Reliance group, but his family's holding in the enlarged company will fall from 44% to 34% as a result of the merger.

Reliance Industries will announce full year results on 23 April.