The Hindu : Business : Videocon close to acquiring Daewoo Electronics

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Wednesday, Sep 13, 2006
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Videocon close to acquiring Daewoo Electronics

Joint bidding with U.S.-based equity fund Ripplewood

NEW DELHI: Consumer electronics major Videocon is acquiring South Korea's Daewoo Electronics in a deal reportedly worth about $700 million (nearly Rs. 3,220 crore).

Videocon Chairman and Managing Director Venugopal Dhoot refused to confirm industry reports that the deal was inked this morning, citing a non-disclosure agreement signed between the two parties a few days ago in Mumbai.

Videocon is jointly bidding with U.S.-based equity fund Ripplewood for the debt-laden Daewoo Electronics, which was put on the block by its lenders. The consortium has reportedly offered $700 million for a 97.5 per cent stake held by the creditors.

`Only realistic option'

According to reports from Seoul, Videocon owns 50.1 per cent stake in the consortium and the balance is held by Ripplewood.

An AFP report, quoting a statement from Daewoo Electronics, said that the takeover move was the "only realistic option'' to save the country's third largest electronics group, which is now in the seventh year of a debt workout programme.

The deal will mark Videocon's third purchase in the last one year after Thompson's global picture tube business for 240 million euros (about Rs. 1,260 crore) and loss making Indian subsidiary of AB Electrolux, Sweden.

Videocon had taken over Electrolux Kelvinator India in a cashless transaction, wherein AB Electrolux agreed to subscribe to Videocon's GDR worth about Rs. 406 crore as part of the deal. — PTI

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