Click to play videoMumbai: India Inc is celebrating the festival of lights with gusto. After Tatas' bid for Corus, Videocon and American equity fund Ripplewood are jointly bidding for Daewoo Electronics, South Korea's third largest electronics firm.
The consortium led by Videocon, in which Videocon owns over 50 per cent, will pay $731 million for 97.5 per cent in Daewoo. The acquisition will be funded through internal accruals.
Videocon Industries' balance sheet released on September 30 last year shows cash accruals of about Rs 1,400 crore.
"Financing is no problem. The balance sheet has got sufficient money and we've got many private equities. We don't need to go for public for this," VN Dhoot, Chairman, Videocon Industries, said.
Daewoo has been plagued by financial woes since 1999. Sources say it posted a net loss of about $97 billion last year. A Videocon press release said the $2.9 trillion company got 83 per cent in revenue from overseas sales in 2005 with America and Europe being its largest markets.
Early in 2006, Dhoot told CNBC-TV18 that he wanted to enter the US market with this acquisition. In the past year, this is Videocon's third acquisition.
It bought Thomson's global picture tube business and AB Electrolux's Indian unit.
Experts say this could give Videocon a leg-up as an original-equipment manufacturer for other brands.
But Daewoo has not been too impressive in India. In a tie-up with Anchor Electronics, it managed 2 per cent or 3 per cent market share.
For that matter, other brands that Videocon bought such as Hyundai Electronics and Sansui haven't had much to write home about either.
Videocon hopes Daewoo Electronics will give it more reason to celebrate.
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