Japanese giant buys 80 in Anchor for Rs 2,000 cr

Japanese company Matsushita Electric Works, owner of the National and Panasonic brands, has bought an 80 per cent stake in Anchor Electricals...

Japanese company Matsushita Electric Works, owner of the National and Panasonic brands, has bought an 80 per cent stake in Anchor Electricals, which is promoted by the Shah family and has a 60 per cent market share in India, for Rs 2,000 crore 420 million. Matsushita Electric Works is a unit of Matsushita Electric Industrial Co Ltd, the world8217;s largest consumer electronics maker.

The Anchor board members would continue to hold the remaining 20 per cent, a senior Anchor official said today. The new Anchor board would have six Matsushita officials while four members of the Shah family would be in the top management body.

The acquisition would help Matsushita gain entry into the 8220;growing but unorganised and fragmented8221; Indian electrical market, Anchor managing director Atul Shah told reporters here today. 8220;We decided to partner with Matsushita for its research and development R038;D and technology to complement our brand value, network and product line up. The partnership will help us to expand our product category,8221; he said.

Matsushita expects to recover the Rs 2,000-crore investment in Anchor over a period of seven years, the new Anchor chairman, Toshihide Arii, said. Arii is a Matsushita representative.

Anchor8217;s sales for March 2006-07 were Rs 920 crore. 8220;We expect to double our sales to Rs 1,800 crore by 2011 and target to grow 10 times in the next decade,8221; Shah informed.

Matsushita8217;s group sales for March 2006 were 13.73 billion, Arii said. The acquisition of a majority stake in Anchor would help Matsushita increase group sales and current market share in Asia, he added. The acquisition of the Anchor stake will hike Matsushita8217;s Asian market share from 30.5 to 36 per cent.

Earlier, Anchor was considering raising of funds through the capital markets but opted for the Matsushita deal because of the Japanese giant8217;s R038;D prowess and technology support.

Story continues below this ad

Mumbai-based Anchor is India8217;s top maker of electrical construction materials ECM such as lighting fixtures and electric wires.

8220;India8217;s infrastructure-related sector including construction and electricity is recording a particularly high growth rate, with expectations for a rapid, continued expansion of the wiring devices and the whole ECM market,8221; Matsushita Electric Works said in a statement.

The Osaka-based company, which aims to boost its overseas sales to 320 billion yen by the year to March 2011 from 222 billion yen in the year that ended March 2006, said the investment is fully self-financed. Ahead of the announcement, shares in Matsushita Electric Works closed down 0.1 per cent at 1,325 yen, roughly in line with the Nikkei average.