The Hindu : Business : Videocon group takes over Electrolux Kelvinator

Online edition of India's National Newspaper
Friday, Jul 08, 2005

Business

Business

Videocon group takes over Electrolux Kelvinator

Special Correspondent

Moves from subsidiary to licensing model

NEW DELHI: Moving fast to consolidate its status in the consumer goods sector, the Videocon group has taken over the entire 91.85 per cent shareholding of AB Electrolux of Sweden in its Indian subsidiary, Electrolux Kelvinator. After completion of the deal, the Swedish company in turn will acquire about 5 per cent shareholding in Videocon Industries with an investment of about $94 million.

The announcement, which comes just a few days after Videocon took over the French consumer electronics major Thomson's colour picture tube units, says Electrolux has entered into a "strategic partnership'' with the Videcon group. Under a separate licence agreement with AB Electrolux, the Videocon group will distribute products under the Electrolux, Allwyn and Kelvinator brands. The licences will be managed through a new branch office of the Swedish company here, which together with Videocon will promote sales of Electrolux products. The branch office will manage the global sourcing needs of AB Electrolux from India. As a result of this strategic partnership, Electrolux said it would move from a subsidiary to a licensing model.

According to company statements issued here on Thursday, the boards of directors of Videocon International and Videocon Industries have also approved the merger of the two companies. The share swap ratio has been fixed at 5:1, which means that the shareholders of Videocon International will get one share of Videocon Industries for five shares that they hold.

Under the agreement signed by AB Electrolux and the Dhoots of the Videocon group, the Indian company will take over Electrolux's manufacturing plants in Shahjanpur in Rajasthan as well as Warora and Butibori in Maharashtra. The three-tier partnership between the two firms includes marketing Electrolux products in India and sourcing components from the country for Electrolux's global operations. It comprises original equipment manufacturing by a local outfit for Electrolux's global market in the next five years. All these relationships are targeted to culminate into a trade turnover of over Rs 6,000 crore annually in next three to five years, says a release.

Printer friendly page
Send this article to Friends by E-Mail

Business

News Update

Stories in this Section

ITI's GSM unit in U.P. on stream

BA, Air Sahara sign MoU

Sensex plunges 142 points

Videocon group takes over Electrolux Kelvinator

Rupee tumbles

Pantaloon to explore new retail formats

Lenovo breathes new life into the tablet PC

"We must move towards a simple taxation system"

Kuwait may cut tax on foreign cos.

Non-stop AI flights to SE Asia

`Discontinuity is an opportunity for new entrepreneurs'

Exchange rates

Bullion rates

TVS Srichakra launches new range of tyres