Titan Industries Ltd, one of India’s top watchmakers, has acquired 293-year-old Swiss watch brand Favre Leuba for Rs 13.8 crore or €2 million. Titan has said in a filing that it has signed a binding agreement with Spain’s Valfamily S.L. and Switzerland’s Maison Favre Leuba, S.A. for the deal. The transaction has been done on an asset purchase mode and will give Titan the global rights to the trademarks of this brand.
“The strategic rationale behind the above acquisition is to complement and strengthen the existing watches brand portfolio of the company with a Swiss heritage brand. Favre Leuba, created in Switzerland in 1737, has a rich history in international markets, including in India,” the Bangalore-based company stated in the filing.
Favre Leuba was one of the largest companies of its time and was part of various groups such as Benedom SA and LVMH, before it re-established its independence in 2003.
The share price of Titan Industries went up over 2 per cent in early trade and was at Rs 208.3, up 1.14 per cent at 12:39 pm on Wednesday.
Titan Industries reported 39.7 per cent increase in revenues at Rs 6,533 crore while profit after tax rose 72 per cent to Rs 433 crore in FY11. For Q2 FY12, Titan sales registered 36.5 per cent growth to Rs 2,100 crore, with PAT rising 16 per cent to Rs 150 crore.
“Watches business revenue grew 16 per cent year-on-year to Rs 420 crore, aided by 19 per cent volume growth. Volumes were aided by sales of lower-to-mid-range watches including Zoop, Sonata and Fast Track. However increase in raw material prices and adverse forex movements affected PBIT margins in this segment, which witnessed 540 bps decline to 16.1 per cent,” an Emkay Global report stated.
