The Dhoots-controlled Videocon group is buying out its Italian partner's 16 per cent stake in Necchi Compressori, its Italy-based compressors joint venture.
"We will be buying out the G Beccaria family's entire stake for around Rs 35 crore," Venugopal Dhoot, chairman of the Videocon group, said.
"We have just received clearance from the Reserve Bank of India to invest the money abroad. Following the deal, Necchi Compressori will become a 100 per cent subsidiary of Videocon International," he added.
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Videocon International holds 84 per cent in the venture, which supplies compressors -- almost 5 million annually -- for Videocon-branded refrigerators and air-conditioners in India.
With the change in shareholding pattern, Necchi Compressori will be rechristened Videocon Compressori. The acquisition will help Videocon enhance its leverage on the European market for its entire consumer durables range. Necchi has been supplying compressors to Videocon International's Indian subsidiary Applicomp (India).
Videocon International acquired a 50 per cent stake in Necchi in 1996. Subsequently, it hiked its stake to 84 per cent. Since then, the latter has been supplying five million compressors for refrigerators made by Videocon International in India.
Of late, the Videocon group has been looking at a string of diversifications -- into aviation, insurance, and telecom -- but plans have come unstuck in all.
The group is also making a splash into the entertainment sector through Videocon Entertainment. It will handle multiplexes, film studios and Hindi film production.
Despite the onslaught from consumer electronics transnationals, Videocon remains the second largest player in the sector in India.