The city gas distribution companies in India, namely AG&P Pratham and Think Gas Distribution, backed by global infrastructure investor I-Squared Capital, are poised to merge. The resulting combined entity, valued at over $ 1.1 billion, will acquire the necessary strength to compete with rivals. The merger is set to be a stock-for-stock arrangement, involving the exchange of a share from one company for each of the other.

At present, I-Squared Capital holds a 100% stake in Think Gas Distribution and a 73% stake in AG&P Pratham, which is the India arm of Atlantic Gulf & Pacific (AG&P) City Gas, based in Singapore. AG&P holds 21%, and a consortium led by Japan's Osaka Gas holds 6%. Given that both companies operate in the city gas distribution (CGD) business, the promoters have decided to consolidate their operations.