Videocon takes over Electrolux Kelvinator

Speaking to The Indian Express, Chairman of Videocon group, Venugopal N. Dhoot said: ‘‘Today’s deal will notch an additional revenue of Rs 6,000 crores per annum from Electrolux to Videocon for the next three to five years.’’

Top company officials took over Electrolux plants across the country on Thursday morning and also met with officials in its Gurgaon office.

By this fiscal-end, the group will now have a combined turnover of over Rs 17,500 crore and joined the list of India’s top 10 business houses in terms of revenues.

The shares of Videocon Industries — with an equity capital of Rs 220 crore — closed today at Rs 451. The total market capitalisation of the group now stands at Rs 10,200 crore.

Electrolux has facilities at Shahjanpur, Warora and Butibori for manufacturing of refrigerators, and washing machines and employs over 1,200 people.

The deal includes, besides transfer of entire equity capital owned by AB Electrolux in EKL, right to market in India brands like Kelvinator, Allwyn and Electrolux.

The three-tier partnership between Electrolux and Videocon group envisions marketing the Electrolux and Kelvinator products in India, sourcing the components from India for Electrolux’s global operations and OEM manufacturing by local Indian outfit for Electrolux’s global market in next the five years.

‘‘Electrolux’s business with component suppliers, IT outsourcing companies and call centre operators will continue to grow in India. In addition, AB Electrolux is looking at developing India as global source for goods and services with a target of $300 million yearly by 2007,’’ Electrolux Asia-Pacific CEO and acting CEO of EKL, Peter Birch said.

In the next three years, Videocon will now invest Rs 300 crore in manufacturing of electric motors and the compressors for refrigerators .

Videocon will invest another Rs 100 crore to build the Kelvinator brand.

5:1 merger ratio

MUMBAI: The board of directors of Videocon Industries and Videocon International on Thursday approved a merger ratio of five shares of Videocon International for every one share of Videocon Industries. Videocon has appointed Development Bank of Singapore and ICICI Bank for the mobilisation of resources to meet the new challenges. The brief also included an independent look and analysis of the business units and the corporate structure of the group. Both the banks had recommended the need for consolidation of all the business units currently owned by Videocon International as well as Videocon Industries into one corporate entity.