Street sees CG Power's acquisition by Tube Investments as a win-win deal

A stronger partner will help business growth; further gains for the stock hinges on pricing and deal completion

The news of Tube Investments of India (TII) acquiring a controlling stake in CG Power and Industrial Solutions (CG Power) has boosted investor sentiment. CG Power has gained 27 per cent while TII shares are up 15.8 per cent since the announcement as the Street sees it as a win-win deal for the two companies. CG Power gets a stronger parent, while TII gets a larger business and growth opportunity, albeit with its share of risk.

CG Power, which provides power and industrial system related services in India and abroad, has struggled largely with stress in its European operations.

While