Videocon in talks to acquire Motorola's handset business
24 May 2008
Diversified group and consumer electronic giant Videocon is in talks to acquire Motorola's handset division, reports quoting its chairman Venugopal Dhoot said.
US-based Motorola's handset business, which has about 15 per cent of the marketshare globally, has a current market valuation of around $3.8 billion.
Videocon, which is also weighing an invitation from GE to bid for its appliances division (see Videocon weighs probable bid for GE's appliance business) declined to give a deadline for the deal and said the talks are at a very early stage.
Videocon which has licences for 22 circle in the country and has received spectrum for starting mobile phone services, is planning to roll out a wireless network in August.
Videocon, which will be launching the service through its subsidiary Datacom, is eying about 10 per cent share in the Indian telecom market in five years.
Motorola has been under pressure from investor activist Carl Icahn to spin off the loss-making division. The sale may take a bit longer since other major handset makers like Nokia, Samsung and LG appeared uninterested.
Videocon, a manufacturer of consumer goods, including computer monitors and televisions, kitchen appliances, and audio equipment, also owns a large oil field that produces 50,000 barrels of oil per day.
An acquisition of Motorola's handset division will help Videocon to derive benefits of synergy between its upcoming telecom services operations and the handset business.