Wednesday, Jun 29, 2005
Videocon buys Thomson colour TV tube business
Thomson to invest euro 225 m in Videocon's oil and gas venture
NEW DELHI: The Videocon group on Tuesday acquired the French giant Thomson SA's entire global colour tube manufacturing business, including units in China, Poland and Mexico for 240 million euros (about Rs. 1,280 crore).
"The group has also lined up an investment of $500 million to be made in the next three years to re-align qualitatively and quantitatively the acquired units,'' the Managing Director of Videocon International, V. N. Dhoot, told reporters here.
"The deal is a zero debt one and the combined capacity of the units will be around 19 million units of colour picture tubes along with four million pieces of colour picture tube glass annually,'' Mr. Dhoot said.
He said the group planned to fund the acquisition on a standalone basis by accessing domestic and international debt and equity markets.
In a simultaneous but separate deal, Thomson will invest 225 million euros in Videocon Industries, the group's oil and gas venture, and another 15 million euros in Videocon International.
"The group's oil and gas venture has a lot of potential and we are upbeat about our financial investment in the company,'' the President and Director General of Thomson, Frank Dangeard, said.
Thomson will be issued fresh GDRs aggregating 14 per cent and 12 per cent stake respectively in Videocon Industries and Videocon International.
Commenting on the acquisition, Mr. Dhoot said the acquisition included full-fledged R&D facilities in Europe and China, along with access to patents and IPRs relating to basic technologies in the colour picture tube segment. Videocon was expected to take full management control of the acquired business by the end of August or mid-September this year, he said.
For Thomson, the sale of colour picture tube business to the Videocon group gives it an opportunity to focus on its core area of media services, systems and equipment technology.
"We will leverage on Videocon's expertise in marketing and distribution to bring our core products in India," Mr. Dangeard said. He said although Thomson sold the business at a much lower value than the aggregate annual sales turnover of about 850 million euros, it was the best deal. "There were about six bidders out of which three were short-listed and Videocon's was the best in financial terms and future commitment toward continuing the business,'' he said. — PTI
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