One of the leading electronics companies operating in India, Videocon has recently announced that it is planning to acquire the mobile handset business of the premium electronics company in the world, Motorola. The officials from the company have stated that Videocon has already forwarded an expression of interest (EoI) for the purpose, however, they said that they cant say anything about it, as it was at a very early stage.
The Chairman of the Videocon group, Mr. Venugopal Dhoot was talking about the companys intentions to buy the Motorola unit and said that the investment-banking firm Merrill Lynch has estimated the unprofitable handset business of Motorola to be worth about $3.8 billion. However, he has declined to divulge any details of the value that he has put on the brand. The industry sources have stated that the estimated value of the Motorola unit is more than double the market value of Videocon Industries. This is the listed company of the group that earlier acquired the television picture tube business of Thomson.
While commenting on the value of Motorolas mobile handset business being far better than Videocons market value, Mr. Dhoot pointed out that the company is having a strong balance sheet, thanks to its oil & gas business. He said, "It has around Rs 2,000 crore cash on its balance sheet and raising debt will not so difficult". The industry sources have stated that the Videocon group is among the major players in the consumer electronics space in India and it has expressed an interest to get into the telecom business, in the recent past. One of the companies of the group named the Datacom Solutions has also recently bagged licenses for providing GSM services in 23 circles of the country.
According to Mr. Dhoot, if they become successful to complete the acquisition of Motorolas mobile handset business, it will be providing immense synergies for the company. In his words, "While we are firming up plans for the cellular services business, we are already present in the front end of the play through our retail business. So, we need a mobile phone supplier to complete the chain". He added that the group has already built a sizeable retail distribution set up of 100 shops through the Next and Planet M outlets in the country. He further informed that Videocon would become the third-largest maker of mobile phones in the world, if it purchases Motorolas hand phone business that is having its facilities in China, Taiwan and India, at the moment.
|
|
|
|
|
| Posted : 4/3/2008 |
|
|
|
|
