Toshiba Corporation and Vijai Electricals Ltd. (Vijai), one of India's leading manufacturers of power and distribution transformers, today announced that they have agreed to Toshiba's acquisition of the major part of Vijai's electricity transmission and distribution (T and D) business for approximately USD 200 million.
The acquisition will be completed in November 2013.
In parallel, Toshiba will establish a new company that will absorb the acquired business, and also integrate Toshiba's state-of-the-art design and manufacturing technologies for T and D systems.
The new company will also enter other growing markets in India, including power electronics systems, such as high voltage direct current (HVDC) power transmission and static var compensators for high voltage networks (SVC), and railway power supply systems.
Toshiba will position the new company as a core production base for expanding its T and D business in India and the global market, alongside its other bases in Japan, China, Brazil, Russia and Southeast Asia.
Vijai was established in 1973, to manufacture and sell electricity distribution transformers.
The business has grown on the strength of the company's high quality production capabilities, which have allowed it to win the top share in the Indian market and major footholds in both Europe and Africa.
Vijai further expanded its T and D business in 2006, when it entered the power transformer and switchgear businesses, and through the business activities Vijai has manufactured and supplied the world's highest voltage class ultra-high voltage 1200 kV power transformer.
"The acquisition is necessary for our global T and D strategy, and Vijai's products and sales channel provide us with an ideal fit for our T and D business in India and beyond," said Takeshi Yokota, Corporate Vice President of Toshiba.
"It will support us not only in the Indian market, where we aim to secure a 20% market share within five years, but in reinforcing our position in the global market, by strengthening our worldwide network", added Yokota.
Dasari Jai Ramesh, Vijai's Chairman added "I'm delighted to reach agreement with Toshiba, a global company. We are proud that our technology strengths and people capabilities will become part of Toshiba Group and will provide them a powerful platform for their business growth and market expansion."
India has recorded year-on-year GDP growth of over 5% since 2003, and long-term capital investment is expected to continue to counter current infrastructure shortages in key areas, including electricity and transportation. The T and D market size is expected to rise to over USD 4 billion by 2015.
