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Rediff.com  » Business » Eveready set to buy BPL arm

Eveready set to buy BPL arm

September 19, 2005 10:45 IST

The Brij Mohan Khaitan group is on a buying spree. After acquiring Williamson Tea Assam, group flagship Eveready Industries India is set to acquire BPL's battery business. The move will give Eveready a market share of around nine per cent.

At present, Eveready has a 47 per cent market share in the batteries market. The deal is likely to be announced soon. Neither Eveready nor BPL executives were available for comments.

The deal could be in the region of Rs 100 crore (Rs 1 billion), given that the Eveready board met recently and decided to raise resources to the tune of $30 million.

BPL reorganised its battery business in early 2004, merging its alkaline battery business with BPL Soft Energy Systems, which manufactured dry cell batteries. The turnover of the alkaline batteries business was in the region of Rs 40 crore (Rs 40 million) and that of BPL Soft Energy Systems, around Rs 130 crore (Rs 1.30 billion).

With the acquisition, Eveready will add a production capacity of 240 million batteries. BPL currently has one manufacturing facility. Eveready's current production is in the region of 1.2 billion batteries.

The acquisition move is in sync with the company's vision of taking its production  capacity to two billion batteries over the next few years, which will catapult Eveready to the rank of the second largest battery maker in the world, pipping Energizer. The largest carbon zinc battery maker in the world is Matsushita with 2.8 billion batteries.

It appears that the stock market has got whiff of the development. On Friday, the scrip touched a high of Rs 134.90 and closed at Rs 133.10, up by Rs 11.55 or 9.5 per cent on the National Stock Exchange.

The tables seems to have turned since 2000 when the group was looking for a strategic investor for the batteries and had even held talks with some companies.

The Williamson Magor group acquired Eveready Industries (earlier Union Carbide India) through McLeod Russel in September 1994 for over Rs 300 crore (Rs 3 billion). Later McLeod Russel was merged into Eveready.
Ishita Ayan Dutt in Kolkata
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