New Delhi, June 28
THE Videocon group today announced that it would be acquiring Thomson SA's global colour picture-tube manufacturing business, including units in China, Poland, and Mexico for 240 million euros (approximately Rs 1,260 crore).
The purchase follows Videocon's agreement earlier this year to buy Thomson's Italian tube factory.
Mr V.N. Dhoot, Managing Director of Videocon International Ltd, said: "The group has lined up an investment of $500 million (including the cost of acquisition) over the next three years to realign qualitatively and quantitatively the acquired units."
He added: "The deal is a zero-debt deal and the combined capacity of the units will be around 1.9 crore units of colour picture-tubes along with 40 lakh pieces of colour picture-tube glass a year."
Interestingly, Thomson in turn would be investing approximately Rs 1,200 crore to pick up 14 per cent stake in Videocon Industries (the Videocon group's oil and gas venture) and Rs 80 crore for 12.5 per cent stake in Videocon International.
"We are only making a financial investment in the Videocon companies," said Mr Frank E. Dangeard, Chairman and CEO of Thomson SA.
The transaction is a key step in Thomson's transformation into a supplier of services and technologies for the media and entertainment industries from being a consumer electronics group.
Mr Dangeard added that the company might commence its core businesses in India through Videocon.
Meanwhile, Videocon said that it has set up an offshore entity called Eagle Corporation through which these acquisitions would be made.
The entity is 100 per cent owned by the group, with the listed companies within the group having a share of 34 per cent in it.
Mr Dhoot said that the group plans to fund the acquisition on standalone basis by accessing domestic international debt and equity markets.
"The total turnover of the acquired units is around 850 million euros (approximately Rs 4,467 crore). With this acquisition, the total turnover of the Videocon group is expected to be $4 billion (approximately Rs 17,500 crore), with more than $2 billion (Rs 8,700 crore) coming from global operations."
He added that the group has drawn out a plan to improve these facilities by adding the latest products and technology such as slim tube, plasma, LCD, and other flat-panel display lines.