Crompton Greaves Consumer to buy majority stake in Butterfly Gandhimathi Appliances

Crompton Greaves Consumer Electricals Ltd. has announced the acquisition of a controlling stake in Chennai-based Butterfly Gandhimathi Appliances Ltd. as per a definitive agreement it signed with the latter on Tuesday. 

The company will acquire up to a 55 per cent stake of Butterfly Gandhimathi Appliances at Rs 1,403 per equity share, aggregating up to Rs 1,379.68 crore, it said in a regulatory filing. 

Crompton Greaves Consumer will also acquire certain Butterfly trademarks in "allied and cognate classes from promoter group entities for a consideration of Rs 30.38 crore." 

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The company will launch the mandatory open offer to the public shareholders of Butterfly for acquiring up to 26 per cent stake in Butterfly for Rs 1,433.90 per equity share aggregating up to Rs 666.57 crore; for an aggregate total consideration of up to Rs 2,076.63 crore, the announcement said. 

The transaction will be subject to completion of customary closing conditions and is expected to be financed through a mix of internal accruals and debt, it added. 

The acquisition will boost Crompton's long-term strategic goal of becoming a leading domestic player in the small domestic appliances segment. 

"Butterfly's complementary product portfolio coupled with scale and channel synergies will drive robust revenue growth and profitability," the company said in the release. 

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Commenting on the development, Shantanu Khosla, Managing Director - Crompton, said, ". This acquisition provides concrete support to our long-term vision of becoming a leading pan-India kitchen appliances player. Butterfly's proven channel and brand strategy will form the base for a stronger SDA business led by mixer grinders. This sets up a platform for a full kitchen play, which will enable a stronger connect with every home." 

VM Lakshminarayanan, Chairman - Butterfly stated, "Butterfly is a strong brand in South India, and this step will provide an opportunity for the Butterfly brand to achieve pan-India reach. Crompton is a synergistic fit and together, there is great potential for powerful complementarity going forward."