Videocon and Thompson Merger
The Videocon and Thompson Merger took place in June 2005. Through this deal the entire color picture tube manufacturing business of Thompson SA including manufacturing units in Poland, Mexico and China has been acquired by Aurangabad based Videocon. The deal was worth 240 million Euros (approximately Rs. 1,280 crores in Indian currency). These three units have a combined capacity of producing 19 million units of color picture tubes and four million pieces of color picture tube glass in a year.
In a simultaneous deal, Thompson agreed to invest an equivalent amount (240 million Euros) in Videocon group industries. Of this amount 225 million Euros were invested in Videocon's oil and gas venture while 15 million Euros were invested in Videocon International. Thompson would acquire stakes worth 14% in Videocon Industries (oil and gas) and 12% in Videocon International. As a result of this dual deal there was not any net outflow of funds from either party involved in the deal.
The dual deal enabled Thompson to focus on its core expertise area of systems and technology on the one hand, and also invest in potentially profitable Videcon group companies on the other. Moreover the Videocon and Thompson merger provided Thompson the opportunity to market their core products in India through Videocon.
For Videocon the deal meant an additional turnover of Rs. 4467 crores (equivalent to around 850 million Euros) from the units acquired from Thompson SA. This merger provided Videocon the potential to generate a total turnover of Rs 17,500 crores, with the turnover from global operations amounting to Rs. 8,700 crores. The merger also gave Videocon the ownership of Research and Development (R&D) centers in Europe and China that were set up by Thompson for technology research. Moreover Videocon gained ownership of patents and IPRS for technologies innovated by Thompson SA. The deal also helped Videocon in its ambitious pursuit of venturing into segments that involved advanced technology like, slim tube, plasma, LCD, etc.
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Last Updated on : 29th July 2013