Crompton Greaves bids $400 million for Emerson Electric's transformer division: report
02 Aug 2010
Power equipment manufacturer Crompton Greaves has offered to buy the transformer division of US-based Emerson Electric Company for $400 million (Rs1,860 crore).
Citing three unnamed investment bankers familiar with the development, the Business Standard today said that if successful, the acquisition would be the Indian multinational's second biggest acquisition after it acquired French company Societe Nouvelle de Maintenance Transformateurs (Sonomatra) in June 2008 for €1.3 million, (See: Crompton Greaves buys French firm Sonomatra for Euro 1.3 million) and the second in the US after it acquired New York-based MSE Power System for $16 million in September 2008 (See: Crompton Greaves acquires US heavy transmissions equipment maker MSE Power Systems)
Emerson, the $20.9-billion diversified global manufacturing and technology company based in Missouri, St Louis, has put up its power transmission solutions business for sale and Crompton Greaves is one of the four bidders that have made a bid and the names of the other bidders could not be ascertained, said the paper.
At the company's 73rd annual general meeting held on 19 July, the Mumbai-based Crompton Greaves chairman Gautam Thapar had said that the company will continue to look at acquisitions despite its earlier overseas acquisitions and joint ventures have not yielded the benefits it should have.
Since 2005, Crompton Greaves has made seven acquisitions, of which, six were made overseas in order to advance its technology as well as to broaden its portfolio.
Crompton Greaves had acquired Belgian company Pauwels and the Hungarian firm Ganz (GTV) and Transverticum Kft (TV), Ireland's Microsol Holdings (MHL), and its associate companies, MSE Power Systems of the US, France's Societe Nouvelle de Maintenance Transformateurs, and UK's Power Technology Solutions Ltd.
For the first quarter of 2010-11, the company reported sales of Rs1340 crore, up 14.4 per cent on year, while its net profit rose 23.9 per cent to Rs140 crore in the reporting quarter.
The company admitted that its performance was weighed down by overseas subsidiaries, which like most other international firms had borne the brunt of the global recession.
