India's consumer electronics major Videocon is acquiring South Korea's Daewoo Electronics in a deal reportedly worth about $700 million (nearly Rs 3,220 crore).
Videocon chairman and managing director Venugopal Dhoot refused to confirm industry reports that the deal was inked on Tuesday morning, citing a non-disclosure agreement signed between the two parties a few days ago in Mumbai.
Videocon is jointly bidding with US-based equity fund Ripplewood for the debt-laden Daewoo Electronics, which was put on the block by its lenders. The consortium has reportedly offered $700 million for a 97.5 per cent stake held by the creditors.
According to reports from Seoul, Videocon owns 50.1 per cent stake in the consortium and the rest is held by Ripplewood.
An AFP report quoting a statement from Daewoo Electronics 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.
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.