India's Videocon acquires Daewoo for $731 million
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India's Videocon acquires Daewoo for $731 million

By SiliconIndia   |   Tuesday, 24 October 2006, 07:00 Hrs
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Mumbai: A consortium led by India's Videocon Ltd. has agreed to acquire South Korea's Daewoo Electronics Corp. for $731 million. The deal would mark the second largest acquisition by an Indian company.

Private equity firm RHJ and Videocon forged the agreement with Woori Bank, the lead bank handling the sale. The consortium had been angling for a controlling stake of 98 percent of Daewoo's equity. While Videocon will own 50.1 percent in the consortium, RHJ will own 49.9 percent.

For Videocon, the Daewoo acquisition comes with its 25 manufacturing facilities in South Korea, the US and the UK, providing the Indian major with a global presence. Daewoo would not only help Videocon move up the value chain in the colour TV business, but also complement its previous acquisitions. In 2005, it had acquired the picture tube business of France’s Thomson for $291 million. Later, it also bought Electrolux Kelvinator India for $76 million.

Videocon Industries Ltd chairman & managing director VN Dhoot said the company would be able to leverage Daewoo’s R&D centres in South Korea for TVs, washing machines and refrigerators.

Daewoo Electronics, ranked behind Samsung Electronics and LG Electronics, last year posted a net profit of 93.9 billion won ($98.2 million) on sales of 2.15 trillion won. It produces a range of consumer goods, including televisions, air-conditioners and washing machines.

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