Dhoots’ Daewoo deal costs $730m
The Videocon Industries-RHJ International consortium said on Monday it had signed a non-binding agreement to acquire 97.6% in South Korea’s Daewoo Electronics Corporation for $730 million (Rs 3,358 crore). Daewoo’s creditors, including Woori Bank and government-owned restructuring company Korea Asset Management Corp, will sell the stake.
While Videocon will own 50.1% in the consortium, Brussels-headquartered private equity firm RHJ will own 49.9%. MBK Partners, a South Korean private equity fund, has been named the reserve bidder.
The deal, in the works for several weeks now, marks the second largest global acquisition by an Indian company after Tata Steel’s $8-billion bid for Anglo-Dutch Corus group. It overtakes Tata Tea’s acquisition of 30% in Glaceau of the US for $677 million.
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.
Shopping Spree
• Videocon and RHJ sign non-binding agreement to acquire 97.6% in Daewoo Electronics for $730 million
• Videocon will own 50.1% in the consortium and Brussels-headquartered RHJ will own 49.9%
Daewoo Electronics is a former unit of the Daewoo Group, which collapsed in 1999 under a $80 billion debt. Last month, the firm strongly supported the proposed takeover but appealed for greater investment.
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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