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Crompton Greaves gets buyout offers for overseas power units

Crompton Greaves Ltd (CG), a part of Gautam Thapar-promoted Avantha Group, has received non-binding proposals from some international suitors for acquisition of its power divisions in Indonesia, North America and Europe, according to a stock market disclosure.

The company has also received offers for the Canadian power and American transportation automation business (formerly known as QEI Inc), separately.

“This is in line with the Board’s strategic intent of focusing on its profitable India businesses and global automation business,” Crompton Greaves said, adding that the proposals are subject to due diligence, negotiation and execution of definitive agreements.

The board of the company has authorised a committee of directors to take the appropriate next steps.

Crompton Greaves has made a dozen of acquisitions over the past decade starting with Pauwels (2005), Ganz (2006), Microsol (2007), Sonomatra (2008), MSE Power System (2008), Power Technology Solutions (2010) and three units of Nelco (2010). More recently it acquired compact fluorescent (CFL) manufacturing business of Himachal Pradesh-based Karma Industries for $2.6 million.

Last July, the company announced that it will demerge the consumer products business into a separate listed firm Crompton Greaves Consumer Electricals Ltd (CGCEL) as a prelude to unlock value from the asset.

At the time of announcement, the company had said that the demerger will create better growth opportunities for its two large but significantly different businesses - power, industrial & automation which is a B2B business, and the consumer products business which is B2C.

In April, Avantha Group sold 34.37 per cent equity stake in its consumer electrical business to Advent International Corp and Singapore’s Temasek Holdings for about Rs 2,000 crore.

Advent International and Temasek will make an open offer for additional shares.

Avantha Group also runs India’s largest paper company Ballarpur Industries, the erstwhile flagship group firm, besides energy generation company Avantha Power. It also has several small and medium size companies in processed food, IT, chemicals, etc.

On Friday, shares of Crompton Greaves were trading at Rs 166.75 per unit, up 0.54 per cent on BSE at 11:20 AM on BSE in a strong Mumbai market.

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