India's largest electronics firm Videocon on Monday said a consortium led by it has reached an agreement to acquire South Korea's debt-burdened Daewoo Electronics for $700 million (Rs 3,150 crore).
The agreement was signed on October 20 by a consortium led by Videocon and creditors of the troubled South Korean firm, which was earlier part of the Daewoo Group that wound up in 1999 after running up a debt of about $80 billion.
"Videocon-led consortium (has) entered into an agreement for acquiring Daewoo (Electronics) at $700 million," a company official confirmed to PTI.
Videocon and US-based equity fund Ripplewood had jointly bid for Daewoo Electronics, after it was put on the block by its lenders.
In a separate statement, the Creditor Financial Institutions Committee for Daewoo Electronics, said: "The consortium was selected... as an exclusive negotiation partner
based on various factors including financial capacity, complementarity of businesses, track record in various acquisitions including commitment toward ongoing investments..."
The deal will mark Videocon's third purchase in the last one year after Thompson's global picture tube business for 240 million euros (about Rs 1,260 crore) and loss making Indian subsidiary of AB Electrolux, Sweden.
Videocon had taken over Electrolux Kelvinator India in a cashless transaction, wherein AB Electrolux agreed to subscribe to Videocon's GDR worth about Rs 406 crore (Rs 4.06 billion) as part of the deal.
While the Daewoo deal has been on for several months now, the news of the acquisition comes on the heels of compatriot -- Tata Steel -- reaching an agreement to acquire Anglo-Dutch steelmaker Corus in what was described as the largest acquisition by an Indian company abroad.
"The completion of the transaction is subject to various conditions, amongst others the execution of definitive agreement, completion of due diligence, corporate approvals by the buyers and the approval of the Korean authorities including the Fair Trade Commission.
Daewoo Electronics had in a statement last month said that the takeover move was the "only realistic option" to save the country's third largest electronics group, which is now in the seventh year of a debt workout programme.
