Advent will lead the acquisition of 34.37% of CG’s consumer products business
The consumer products business will be demerged from Crompton Greaves and established as a standalone publicly listed company, Crompton Greaves Consumer Electricals Limited. Advent will provide resources and sector expertise to support the growth of CGCEL as a free-standing enterprise.
Advent International ("Advent") and Avantha Holdings Limited ("Avantha"), the promoter of Crompton Greaves Limited ("CG") announced that they have signed a share purchase agreement whereby Advent will lead the acquisition of 34.37% of CG's consumer products business, Crompton Greaves Consumer Electricals Limited ("CGCEL"). Temasek will be an independent co-investor alongside Advent in CGCEL.
CGCEL will be demerged from CG into a standalone company and will consequently be listed on the National Stock Exchange of India ("NSE") and Bombay Stock Exchange ("BSE"). Thereafter, Advent, a global private equity firm with a dedicated presence in India, and Temasek, an investment company based in Singapore, will make an open offer for additional shares of CGCEL in compliance with takeover regulations.
The transaction values CGCEL at an enterprise value of INR 66 billion (US$1.07 billion). The transaction is subject to closing conditions and receipt of all statutory and other approvals, including the successful demerger of CGCEL from CG and approval from the Reserve Bank of India and Competition Commission of India.
CGCEL, one of CG's largest and fastest-growing businesses, manufactures and markets a wide spectrum of consumer products, ranging from fans, lamps and luminaries to pumps and household appliances such as water heaters, mixer grinders, toasters, irons and electric lanterns.
The business is India's market leader in fans, No. 1 player in residential pumps and has leading market positions in its other product categories. It employs approximately 3,500 people and has six manufacturing facilities.
"After an extensive search and careful evaluation, Avantha is pleased to have signed a share purchase agreement for the sale of its stake in Crompton Greaves' consumer business," said Gautam Thapar, Founder and Chairman of the Avantha Group. "Both Advent and Temasek have extensive financial, sector and operational expertise, and we believe they are well-positioned to support CGCEL in its next phase of growth. I thank all of CGCEL's employees who have given their best and firmly believe that they will benefit from further expansion and focus under the new stewardship."
"CGCEL is an attractive business that we believe will thrive as a standalone company," said Shweta Jalan, Managing Director at Advent International in Mumbai. "It has leading positions in several fast-growing product categories with strong brand names and extensive distribution capabilities. Post completion, we look forward to driving growth by investing in sales and marketing, distribution and enhanced product offerings."
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