By Craig Zammit
INDIA: Videocon Industries, in conjunction with consortium partner RHJ International SA – a holding company of the U.S equity fund Ripplewood Holdings LLC – has formalised its acquisition of South Korean appliances and CE maker, Daewoo Electronics Corporation.
After emerging as the preferred bidder with a $US 726 million bid for the business, Videocon will now own 50.1 per cent of Daewoo Electronics in the consortium, with the Brussels-based RHJ International owning the remaining 49.9 per cent.
With 25 manufacturing facilities across Korea, USA and the UK, Daewoo will now join Videocon’s other recent major acquisitions, global picture tube business Thomson and Electrolux Kelvinator India, and help build Videocon’s presence around the world.
In addition to the benefits derived from the Daewoo deal, it is assumed Videocon will inherit the strategic partnership agreement formed by Daewoo with German home appliance BSH Bosch and Siemens Hausgeräte.
The $US300 million strategic partnership reached in early February 2006, will see Daewoo Electronics supplying no less than 100,000 side-by-side refrigerators to BSH every year for three years starting in 2006, with units being exported to Australia, Italy, Germany, Britain and the USA.
The purchase ranks behind Tata Steel’s almost $US8 billion bid for Anglo-Dutch Corus Group as the second largest global acquisition by an Indian company, and becomes one of the largest acquisitions in South Korea’s domestic consumer durables industry.
Daewoo Electronics, which before the deal was in the seventh year of its debt management program, is a spin-off from the Daewoo Group which collapsed in 1999, after it totalled debts of more than $US80 billion.
Daewoo Electronics Australia and BSH Australia have declined to comment on the matter at this stage.