French electrical major Schneider Electricals SA is in advanced stages of negotiations with the Mumbai-based Shah family to acquire Anchor Electricals, the country's leading electrical equipment maker.
The deal is estimated to be worth over Rs 2,400 crore (Rs 24 billion).
Sources close to the development said the Paris-based Schneider had earlier shown interest in buying the promoters' stake in Anchor nearly eight months ago. But the deal did not materialise at that time due to differences between the two parties on valuation.
"The differences have been sorted out since then and both the parties are giving final touches to the agreement. An announcement is expected shortly," they added.
They said other players that had shown interest in Anchor included Germany's Siemens, Japan's National Matsushita and a couple of private equity investors. The deal will be the largest acquisition in the country's fast growing electrical business.
Schneider Electric is a power and control specialist with world-class brands like Merlin Gerin, Square D and Telemecanique. It has 105,000 employees and operations in 190 countries. Schneider Electric generated sales of euro13.7 billion in 2006 through 13,000 distributor outlets.
This acquisition will help Schneider, which has a presence in India through its wholly-owned subsidiary Schneider Electric India, to consolidate its position in the fast growing switches, sockets and circuit braker industry.
Anchor is the market leader in India with a 50 per cent share, registering 20 per cent growth over the past few years. Anchor recently sold its Maharashtra plant to China's Haier Group for close to Rs 100 crore (Rs 1 billion).
The other major players include MK Electric and Havell's. Schneider, which has only a 10 per cent share, is also present in the electrical distribution, industrial control and automation segments.
Schneider has been on an acquisition spree all over the world in the last few months. Last year, it bought GET group in the UK and Napac in France.
Switched On