The 3rd-largest player in room ACs af­ter Voltas and LG to help ex­pand Havells’ port­fo­lio

The Economic Times - - Companies: Pursuit Of Profit - Ashutosh R Shyam & Arijit Bar­man

Mum­bai: Havells In­dia is in ad­vance ne­go­ti­a­tions with Lloyd Elec­tric and Engi­neer­ing to ac­quire its con­sumer durables busi­ness and get a toe­hold in the fast­grow­ing In­dian air con­di­tion­ers mar­ket that is dom­i­nated by global brands, mul­ti­ple peo­ple in­volved in the talks said. Havells may do the deal for ₹ 1,200-1,500 crore, they added. In a mar­ket crammed with about two dozen brands, Lloyd is the third-largest player in the room AC seg­ment af­ter Voltas and LG.

Ever since Havells sold its 80% stake in its in­ter­na­tional arm Havells Syl­va­nia Malta BV— one of the top four light­ing brands in Europe and Latin Amer­ica — for ₹ 1,070 crore to Shang­hai Feilo Acous­tics of China in De­cem­ber 2015, it has been scout­ing for tar­gets from emerg­ing mar­kets and In­dia for brands with strong busi­ness prospects. It also has an op­tion to sell the bal­ance stake in three years from the time of sale, or even ear­lier.

Nipun Sing­hal, di­rec­tor of con­sumer durables at Lloyd Elec­tric,

told ET that they are not aware of any devel­op­ment about any po­ten­tial sale to Havells In­dia.

Mails to Havells spokesper­son did not gen­er­ate a re­sponse till t he t i me o f g o i ng t o p r e s s. Re­peated calls to Anil Rai Gupta, chair­man, Havells also went unan­swered.

But in ear­lier in­ter­ac­tion in Jan­uary, Gupta, had said he will ac­quire only brands or busi­nesses in emerg­ing mar­kets that help in se­cur­ing new tech­nolo­gies or ex­pand his ex­ist­ing busi­ness port­fo­lio. He de­clined to com­ment on Lloyd then.

The con­sumer busi­ness for Lloyd Elec­tric is its main­stay and ac­counted for 58% of its to­tal rev­enues and 44% of op­er­a­tional prof­its in De­cem­ber 2016. Its other busi­ness di­vi­sions — heat ex­chang­ers, orig­i­nal equip­ment man­u­fac­tur­ing and pack­aged AC busi­ness — have seen flat or de­clin­ing sales.

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