This story is from July 8, 2005

Videocon buys Electrolux Kelvinator

TNN / Jul 8, 2005, 00:50 IST

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NEW DELHI: Videocon group on Thursday, formalised an agreement with Swedish appliances firm AB Electrolux, to acquire the entire 91.85% stake in its loss-making Indian subsidiary Electrolux Kelvinator Ltd.

NEW DELHI: Videocon group on Thursday, formalised an agreement with Swedish appliances firm AB Electrolux, to acquire the entire 91.85% stake in its loss-making Indian subsidiary Electrolux Kelvinator Ltd (EKL).
According to the agreement, AB Electrolux will invest about Rs 500 crore in Videocon Industries, and acquire about 5% shareholding in Videocon Industries.The Dhoot family-owned Videocon group will take over three manufacturing facilities of EKL in India, at Shahjanpur (Rajasthan), Warora (Maharashtra) and Butibori (Maharashtra).
"AB Electrolux will also buy components from us, and give a business of around Rs 5,000 to Rs 6,000 crore per annum," Videocon CMD, Venugopal Dhoot said.
Under a separate licence agreement with AB Electrolux, the Videocon Group will distribute products under the Electrolux and Kelvinator brands in India. The licences will be managed through a new branch office of AB Electrolux in India which, together with Videocon, will promote sales of Electrolux products. As a result of the strategic partnership with the Videocon group, Electrolux will no longer function as a subsidiary, instead a licensing model will come in place.

While the branch office will manage global sourcing needs of AB Electrolux from India, the Videocon network will provide after-sales service and spare parts for all Electrolux appliances.
Videocon's latest acquisition comes barely a week after it announced the buyout of French giant Thomson's colour picture tube business for about Rs 1,280 crore.
The Videocon group's brand portfolio in India now includes Videocon, Sansui, Akai, Kenstar, Hyundai, Toshiba, Electrolux and Kelvinator.

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