Videocon Intl to be merged with Industries

The Videocon group has proposed to merge its consumer durables arm Videocon International with Videocon Industries, the oil and gas company.

Group chairman Venugopal Dhoot told Business Standard that ICICI Securities has been appointed to help advise the merger ratio. He added the swap ratio may be announced towards this weekend. The combined market capitalisation of the two companies stood nearly at Rs 9,500 crore.

"The merger is in line with the group's plan to bring all the Videocon companies under one umbrella. Now, we are taking a step forward towards that direction by merging Videocon International with Videocon Industries. The respxective boards of other group companies will independently decide whether they want to merge their entities with Videocon Industries," Dhoot added.

Analysts said the proposed merger indicated the group's focus on oil and gas business, being run by Videocon Industries.

Videocon Industries has recently bid for oil exploration on blocks in Sudan, Nigeria, and Jordan. The company is planning to invest $100 million in a Sudanese oil field. It will target key blocks in the Middle East and Africa for exploration, said Dhoot.

Equally ambitious is the consumer electronics business of the group, which recently announced plans to acquire the Colour Picture Tubes (CPT) manufacturing business of Thomson SA for euro 240 million (about Rs 1,280 crore).

In a parallel development, Thomson SA has agreed to invest an identical sum of euro 240 million in equity shares of the Videocon group. Videocon International (euro 15 million) and Videocon Industries (euro 225 million).

Videocon International reported a turnover of Rs 4,003.1 crore for the year ended September 2004. Videocon Industries achieved a turnover of Rs 135 crore for the year ended March 2005.

Videocon International is the consumer electronics arm of the group. Videocon Industries takes care about oil and gas exploration for the group. Videocon Appliances Ltd and Videocon Communications Ltd are the other companies of the group listed on the Bombay Stock Exchange.