March 29 (Reuters) - Indian packaging company EPL Ltd

said on Sunday it had agreed to merge with Indovida,

backed by Thailand's Indorama Ventures, in a deal valuing the

combined business at about $2 billion.

The merged group will combine EPL's packaging operations

with Indovida's plastics portfolio.

Under the transaction, EPL is valued at about $1.2 billion,

implying a price of 339 Indian rupees ($3.58) per share, while

Indovida is valued at about $700 million.

Following the merger, Indorama Ventures will become a

co-promoter with a 51.8% stake in the combined company, while

private equity firm Blackstone, which backs EPL, will

hold about 16.6%.

EPL Chief Executive Hemant Bakshi will remain group CEO,

while Indovida CEO Sunil Marwah will continue to run the

Indovida business.

The transaction is subject to regulatory, shareholder and

court approvals and is expected to close within about a year.

($1 = 94.7770 Indian rupees)