Temasek, Advent seek majority stake in Crompton Greaves unit
Temasek Holdings and Advent International have launched an open offer to acquire a controlling stake in Crompton Greaves Consumer Electricals (CGCEL), the former consumer products unit of India's Crompton Greaves, for up to INR16.9 billion ($253 million).
Temasek and Advent are willing to pay INR104 per share for up to 163 million shares in CGCEL, operating through their respective subsidiaries MacRitchie Investments and Amalfiaco, according to a filing. Added to the 34% stake the two firms acquired from Avantha Group last year, the purchase will give them a 60% share in CGCEL.
Temasek and Advent's takeover bid comes after CGCEL's listing on the Bombay Stock Exchange and the National Stock Exchange, as per the terms of the deal with Avantha. The Crompton Greaves board approved the demerger of CGCEL and its listing last March. The offer price is a significant discount to CGCEL's price of INR139 in midday trading May 16.
CGCEL is India's leading manufacturer of fans and residential pumps, and produces a wide range of other consumer products, including lamps, water heaters, toasters and irons. It has six manufacturing facilities and employs 3,500 people across India.
Avantha, the promoter of Crompton Greaves, has been seeking to reduce its debt and focus on its core business over the last two years through a number of avenues, including the sale of CGCEL last year and the divestment of its offshore businesses to US-based PE firm First Reserve International for EUR115 million ($126 million) earlier this year.
The company has also sought investment from private equity firms; Aion Capital Partners and Apollo Global Management committed INR9.6 billion to Avantha in 2013, and KKR provided Avantha with $100 million in long-term financing in 2014.
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