French stationery major BIC Group has increased its equity interest in Daman-based stationery firm Cello Pens Pvt Ltd to 100 per cent with the acquisition of remaining stake for Rs 540 crore (over $81 million), according to a press release.
The French firm has bought the stake from Cello Group. With the acquisition, Cello Pens is now completely owned by BIC Group.
“This acquisition will help accelerate Cello Pens’ growth in India and support its integration within BIC, with a focus on investing in local manufacturing, safety and quality,” the statement said.
Cello Pens was founded in 1995 by the Rathod family.
“Moving to 100 per cent ownership in Cello Pens is an opportunity to reinforce our position as India’s number 1 writing Instrument brand and to further BIC’s development in Asia. We are confident in Cello Pens’ management team's abilities to leverage the strong asset that is the Cello brand, driving toward strong growth,” Bruno Bich, BIC chairman, said.
Cello Pens is the country’s largest manufacturer and distributor of writing instruments with a broad portfolio of products and a countrywide and international, distribution network.
BIC Group had agreed to acquire a 40 per cent equity stake in seven entities representing the writing instruments business of the Cello Group for Rs 790 crore or overall valuation of Rs 1,975 crore (€310 million or $402.5 million) back in January 2009.
The French firm completed stake purchase of 40 per cent in six of the seven entities for Rs 380 crore. However, in January 2010, Cello management proposed to BIC to unwind and terminate the definitive agreements signed the previous year. BIC declined to do so and initiated international arbitration proceedings in August 2010 to complete the acquisition of 40 per cent of the seventh entity namely Cello Pens, the flagship unit.
As part of the agreement, the French group had call options to raise the holding in the group firms in tranches up to 90 per cent by 2017. Subsequently, BIC Group
exercised the option to raise the holding in all seven entities to 55 per cent for Rs 280 crore in October 2013.