Berger International, the overseas subsidiary of Asian Paints, has announced that it will divest its stake its European subsidiary based in Malta.
Berger International has signed an agreement with Van Gee Bee, its local partner in Malta, to sell off its 84.2 per cent in the company for $1.8 million.
"Our operations in Malta has no strategic fit, as it is our only subsidiary in Europe and its contribution to our group's sales is not significant (2 per cent in 2003). Further, the paint market in Malta is small and has not been growing in the past few years. It has also been taking up disproportionate management time for its size," said Jalaj Dani, chairman, Berger International.
Berger International had invested $1.51 million to acquire its 84.2 per cent stake in the subsidiary. As a result of the divestment, Berger Malta will cease to be a subsidiary of Berger International but Berger International will enter into a technical service and trademark agreement with Berger Malta.
Berger International will continue to receive royalties for services provided and use of trademark.