Home appliances manufacturer Whirlpool of India Ltd has said that it will acquire 49% stake in kitchen equipment maker Elica PB India Pvt. Ltd for around Rs 162 crore ($24.2 million).
In a stock market disclosure over the weekend, Whirlpool said the acquisition was in line with the company’s strategy of expanding its cooking and built-in appliances business.
Elica India, which was incorporated in April 2010 in the country, is a unit of Italy’s Elica SpA.
Whirlpool India’s parent firm Whirlpool Corp already holds 12.5% stake in Elica SpA. As part of the transaction, Whirlpool India will acquire a portion of the shares from Elica SpA, the statement said.
Pralhad Bhutada will continue to be the chief executive officer of Elica India and the firm will continue to be a subsidiary of Elica SpA post the acquisition. The transaction is expected to be completed in the next eight weeks subject to approvals.
Elica India manufactures and sells kitchen equipment such as kitchen hoods, hobs, built-in ovens, refrigerators, built-in microwave ovens, dishwashers, barbecue fryers, kitchen sinks, and waste disposers. It clocked a turnover of Rs 138 crore in the fiscal ended 31 March 2017 as compared to Rs 112 crore in 2015-16 and Rs 81 crore in 2014-15.
“The cooking and built-in appliance space is poised for very strong growth in India based on increasing consumer demand,” said Sunil D’Souza, managing director of Whirlpool India. “Whirlpool aims to expand its portfolio of innovative products with Elica’s impressive capabilities in consumer insights, design, manufacturing and also broaden its distribution.”
According to a report by consulting firm TechSci Research, the market for built-in kitchen appliances in India is projected to grow at a compound annual growth rate (CAGR) of over 17% during 2016-2021, on account of changing consumer lifestyles and increasing customer awareness about benefits of using built-in kitchen appliances.
Whirlpool entered India in the late 1980s as part of its global expansion strategy and presently owns three facilities at Faridabad, Pondicherry and Pune in the country.
Whirlpool India reported revenues of Rs 4,985.83 crore in the financial year 2017-18 against Rs 4360.38 in the previous fiscal. It had clocked a net profit of Rs 350.67 crore during the period as compared with Rs 310.49 crore in 2016-17.
Its share price on the National Stock Exchange stood at Rs 1,544.20 after trading ended on Monday, 0.38% lower than the previous close.