Bangkok-based Indorama Ventures—controlled by petrochemicals billionaire Aloke Lohia—has agreed to merge its Indian packaging unit, Indovida India, with EPL, a company backed by U.S. private equity giant Blackstone, in a $2 billion deal.

The proposed merger comes a year after Indorama bought an initial 24.9% stake in EPL from Blackstone for 19 billion rupees ($219 million). With a market cap of $1.2 billion, India-listed EPL manufactures plastic laminates and tubes for customers in pharmaceutical and the fast-moving consumer goods industries.

“Combining Indovida with EPL is the logical next step and enables us to........

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