Videocon Industries is finally making official the acquisition of South Korean appliances and consumer electronics maker Daewoo Electronics Corp.
Videocon Industries, Inc., (Mumbai, India) and its partner signed a preliminarily agreement to purchase Daewoo Electronics for approximately U.S. $726 million. The partner is RHJ International SA, a holding company of the U.S equity fund Ripplewood Holdings LLC. The final closing date is not yet known.
Daewoo electronics has been under the control of South Korea's state-run Korea Asset Management Corp. (KAMCO). The troubled home appliance and consumer electronics maker was in a debt workout program since parent Daewoo Group collapsed under debts of nearly U.S. $80 billion in 1999. KAMCO is a state asset management company and a major shareholder in Daewoo Electronics, once one of Korea's top home appliance makers. Woori Bank, South Korea's second-largest lender, handled the sale.
Daewoo will be the third major acquisition by Videocon in recent years. It purchased the global CRT business from French consumer electronics maker Thomson, and announced intentions to use the CRT manufacturing facilities in Anagni, Italy as a hub for manufacturing other appliances in Europe. Soon after in 2005, Videocon acquired a 91.25-percent equity stake in Electrolux's Indian subsidiary, Electrolux Kelvinator Ltd (EKL). The agreement also has Electrolux sourcing components from Videocon, and Videocon said it wanted to make itself into a major supplier for Electrolux.
Videocon's Strategic Partnerships: Electrolux & BSH
The addition of Daewoo expands Videocon's global manufacturing base substantially, and the acquisition is assumed to include the strategic partnership agreement formed by Daewoo with German home appliance OEM BSH Bosch und Siemens Hausgeräte GmbH. Under the terms of the U.S. $300 million deal, reached in early February 2006, Daewoo Electronics will supply at least 100,000 side-by-side refrigerators annually to BSH for 3 years starting in 2006. More than 350,000 units will be exported to Italy, Germany, Britain, the U.S., and Australia.
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