Home Retail Eveready set to acquire 80 pc in French co Uniross

    Eveready set to acquire 80 pc in French co Uniross

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    Ltd is set to acquire 80 per cent stake in Uniross SA, a French company engaged in the manufacture and distribution of rechargeable batteries and allied products.

    “This will be Eveready’s first overseas acquisition,” , vice-chairman of Eveready, told newspersons over phone from Frankfurt.

    The acquisition, as Khaitan explained, would be through a joint venture company or special purpose vehicle being floated in partnership with Paris-based CH Holding that currently holds about 65 per cent stake in Uniross. “Following the acquisition, CG Holding’s stake in Uniross will drop to around 20 per cent,” Khaitan said. Eveready’s equity stake in Uniross post acquisition would be 80 per cent.

    He, however, declined to give the probable size of equity. “It is still to be decided,” he said, adding, “we’re injecting cash into the company”. The other details, such as the composition of the board and the name of the JV/SPV, too are yet to be sorted out, he added.

    “Our investment in Uniross will be maximum of € 10 million by way of equity and debt,” he said, pointing out that the equity component would be € 6 million while the balance € 4 million would be debt. The funding would be partly by way of loans from Indian banks and partly by way of internal generation. “The debt has been tied up,” he said.

    Khaitan gave several reasons in support of the acquisition. First, Eveready would enter in a big way into rechargeable batteries whose market was growing worldwide. Second, Uniross has technology for various types of rechargeable batteries such as nickel cadmium, nickel-metal hydride, lithium ion and zinc cell and finally, Uniross has a base in China and subsidiaries in Hong Kong and South Africa. The acquisition, therefore, would help Eveready to strengthen its position in various parts of the world.

    “In India, however, both Eveready and Uniross brands will exist side by side while outside India, we’ll sell only Uniross brand.”

    The € 40-million Uniross had not been doing too well lately due to several reasons such as recession, difficulties in securing institutional finance, jump in raw material prices, particularly nickel, and not-so-satisfactory performance of the company’s US-based outfit. Asked if the present acquisition would also cover the US company, Mr Khaitan made it clear that there was no such plan, at least immediately.

    The closing of the deal would be subject to “satisfactory legal, accounting, commercial, tax and other due diligence of Uniross and its subsidiaries and group companies, receipt of all necessary regulatory approvals and finalisation and execution of the definitive legal and binding agreements, including shareholders agreement,” he added.

    Source: Business Line