Leading Indian electronics goods maker Videocon has acquired the colour TV tube business of France's Thomson SA for 240 million euros (Rs.12.6 billion).
Under the agreement, Videocon will acquire Thomson's facilities in China, Mexico and Poland, a company official said.
Thomson had earlier this year sold its tube manufacturing plant in Italy to Videocon as part of its strategy to exit from non-core operations and focus on media and entertainment business.
Videocon proposes to fund the acquisition on a "stand-alone basis" by accessing domestic or international debt and equity markets, the official, who didn't want to be named, told IANS.
Thomson has agreed to invest 225 million euros through a placement in Videocon Industries, the energy business arm of the Videocon group.
The French firm will invest an additional 15 million euros in Videocon International. Following these private placements, Thomson will hold 14 percent in each of the two Videocon group companies.
The acquisition of Thomson's television tube making business strengthens the international expansion strategy of Videocon, which competes with South Korea's LG and Samsung in the consumer electronics and white goods market in India.
The deal will also allow the group to develop its global manufacturing base through the integration of Thomson's four major tube manufacturing plants that together employ around 11,500 people, said the official.
{{/usCountry}}The deal will also allow the group to develop its global manufacturing base through the integration of Thomson's four major tube manufacturing plants that together employ around 11,500 people, said the official.
{{/usCountry}}The four plants are located at Foshan and Dongguan in China, Mexicali in Mexico, and Piaseczno in Poland.
The transaction, which is subject to the approval of the regulatory authorities in India and France, is expected to close at the end of the third quarter of 2005 in December.
Following this agreement, Thomson and Videocon intend to develop partnerships in the Indian market and internationally.
"With this agreement Thomson completes its transformation and can fully focus on its core media and entertainment business," said Frank E. Dangeard, chairman and chief executive officer of Thomson.