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Havells' Lloyd Consumer buyout to help gain strategic foothold in AC market

It has acquired Lloyd's consumer durable business that is engaged in AC, TVs & other home appliances

Lloyd consumer durable products
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Lloyd consumer durable products
BS B2B Bureau New Delhi
Last Updated : Feb 21 2017 | 11:15 AM IST
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Havells India Ltd has forayed into consumer durables industry with the acquisition of Lloyd Consumer Durable Business Division for Rs 1600 crores on a debt free, cash free basis subject to closing adjustments.  The move is expected to provide Havells a strong springboard for growth in the Indian AC market, which is estimated at about Rs 15,000 crore.

Havells has signed an agreement with Lloyd Electrical and Engineering Limited and Fedders Lloyd Corporation Limited for acquiring Lloyd brand and the consumer durable business that is engaged in sourcing, assembling, marketing and distribution of consumer durables including air conditioners, TVs, washing machines and other household appliances. The proforma net revenues of consumer durable arm, Lloyd Consumer for 9 months ended 31 December, 2016 stood at Rs 1,113 crores and EBDITA of Rs 75 crores. Based on its run rate and past performance, full year net revenue is estimated at circa Rs 1,700 crores with proforma EBDITA of Rs 110 crores.

Havells will acquire the consumer business infrastructure, people, distribution network including and not limited to absolute, exclusive ownership and right to all intellectual property of brand Lloyd, logo, trademark, goodwill and attendant rights.

The transaction is subject to confirmatory due diligence and is expected to close in next 8 weeks. The company plans to finance the transaction through a mix of debt and internal accruals.

Through this acquisition, Havells would mark a foray into consumer durables industry currently estimated at $ 15 billion and growing in double digits with low penetration levels, increasing urbanisation, aspirational and expanding middle class. Lloyd has, over the last decade, built a brand, distribution and service network to provide a comprehensive experience to its consumers. It is among the top 3 brands in air-conditioners’ category with a well-entrenched national network in tier I and II cities. The brand has expanded into TVs and washing machines as well.

Anil Rai Gupta, chairman & managing director, Havells India Limited, said, “The proposed acquisition is in line with Havells objective of ‘Deeper into Homes’, driving domestic expansion and owning a brand and distribution oriented asset. We would leverage and extend the trust associated with brand Havells to consumers, dealers, vendors of Lloyd and create a similar recognition in consumer durables segment. We believe Lloyd is undergoing a journey similar to Havells of the past and we could combine together our consumer insights to accelerate its pace of growth.”

He added, “We would be firmly focused to fulfill Indian consumer’s aspirations through a superior delivery of product ownership, technology, availability and servicing. This acquisition has, thus, given us an opportunity to serve our discerning consumers with a much wider range of products, both in electrical and electronic goods space.”
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First Published: Feb 21 2017 | 11:11 AM IST

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