New Delhi, July 5
THE VIDEOCON group on Tuesday said that it is planning to merge two of its group companies, Videocon Industries and Videocon International.
According to Mr V.N. Dhoot, Managing Director, Videocon International, the amalgamation of the businesses of the two companies is being done on the basis of advice given by the Development Bank of Singapore and ICICI. "The combined market capitalisation of the two firms would be around Rs 9,600 crore," Mr Dhoot told Business Line.
While Videocon International is in the business of consumer durables/electronics, Videocon Industries has interests in the oil/energy sector. The company's board of directors will consider the amalgamation proposal at their meeting on Thursday.
The France-based Thomson SA had recently acquired 14 per cent stake each in Videocon Industries and Videocon International for a sum of Rs 1,280 crore. This was announced along with the Videocon group's purchase of the picture tube manufacturing business of Thomson SA for approximately the same amount.
According to market analysts, the merger of the two entities, both of which are listed, would provide the group with a much larger asset base as a consolidated entity, and, thus, allow it carry out its expansion plans in a more effective manner.
Interestingly, news of the proposed amalgamation comes amid intense speculation in the market that Videocon is a front-runner to purchase the facilities of Electrolux Kelvinator.
The Videocon group is eyeing a turnover of Rs 18,000 crore this year, with roughly Rs 11,000 crore coming from the overseas markets.