Videocon buys Thomson tube arm for Rs 1,272 cr

Videocon holds 19 per cent equity in the offshore vehicle that is making the acquisition. The acquisition is being funded through domestic and international debt and equity market.

Videocon has plans to pump $500 million (Rs 2,200 crore) over three years into the venture, including cost of acquisition. Management control will pass from Thomson’s to Videocon hands in August or by mid-September.

‘‘Videocon will also take over Thomson’s R&D facilities for picture tubes in Europe and China, and an array of patents and intellectual property to drive future growth and innovation,’’ Videocon group Chairman, V.N. Dhoot said here on Tuesday.

The aggregate annual sales turnover of Thomson SA’s picture tube business is at about Euro 850 million in a full year of operation. ‘‘The sales of our colour tube business gives us an opportunity to focus on our core area — media services, systems and equipment technology where we are industry leaders,’’ said Frank Dangeard, president and director general, Thomson SA.

‘‘We will leverage on Videocon’s expertise in marketing and distribution to bring our core products in India,’’ he added. In a separate arrangement, Thomson will place, with a three-year lock-in, Euro 225 million in Videocon Industries Ltd, Videocon’s oil and gas venture, and another Euro 15 million in flagship Videocon International Ltd. Both these companies are listed. ‘‘The group’s oil and gas venture has a lot of potential and we are pretty much upbeat about our financial investment in the company,’’ Dangeard said.

Thomson will be issued fresh GDRs aggregating 14 per cent and 12 per cent stake, respectively, in Videocon Industries and Videocon International.

Dhoot said 90-95 per cent of the market for TVs was glass picture tube-based, in the $100 a piece segment, leaving only 5-10 per cent for the up and coming plasma and LCD-TVs, which are priced in the $1000 and above range.

‘‘As of now, the market is tough in the consumer durables space, but only a certain class of people are buying LCD or plasma CTVs. I believe there is a clear-cut segment which opts for and plasmas, whereas there is solid demand globally for the 150-million unit glass-tube based TVs,’’ Dhoot said. After integration of Thomson’s colour picture tube business with it, the total turnover of the Videocon Group is expected to be Rs 17,500 crore with more than Rs 8,700 crore coming from global operations.

Electrolux buy likely

NEW DELHI: Videocon is likely to acquire the Indian subsidiary of Swedish white goods company AB Elextrolux. Sources said the deal was likely to be announced in the next 15 days, after it is sealed in Stockholm. The buyout is expected to include the three production facilities and branding rights for the Indian market. Videocon Chairman V.N. Dhoot declined to comment, citing regulatory reasons. — PTI