India“s consumer electronics and energy business group Videocon Group has acquired the television picture-tube business of France“s Thomson SA for USD 292 million, gaining a manufacturing presence i…
India“s consumer electronics and energy business group Videocon Group has acquired the television picture-tube business of France“s Thomson SA for USD 292 million, gaining a manufacturing presence in China, Mexico and Poland. Thomson will reinvest most of the money back into Videocon to help fund its oil exploration plans. The deal helps Videocon, primarily a maker of televisions and audio products, to expand outside India, where it faces stiff competition from South Korea“s Samsung and LG Electronics as well as Netherlands-based Philips. Videocon, based in the western Indian town of Aurangabad, bought Thomson“s Italian picture tube plant in February 2005. Thomson said it would invest the proceeds of the sale in two Videocon units with an option to exit in three years. Thomson will put USD 273.75 million into Videocon Industries Ltd., which has offshore oil field interests while Videocon International Ltd., which is building a picture tube plant in Jordan, will get the remaining USD 18.25 million. Thomson will own 14% each in the units. Thomson“s video glass-making business at Bagneaux-sur-Loing, France, is not part of the Videocon deal. The company has written off USD 304 million in the deal but said the loss might be reduced depending on the performance of the investments in the Videocon units. “Of the different options examined by Thomson, Videocon“s proposal was the most coherent for the development of the tube activities outside Thomson, fulfilling Thomson“s objective to secure a long-term future for the [picture] tube business,” Thomson, based in the Paris suburb of Boulogne-Billancourt, said in a statement. About 11,500 are employed at Thomson“s four plants at Foshan and Dongguan in China; Mexicali in Mexico; and Piaseczno in Poland. Videocon becomes the world“s fourth-largest maker of television picture tubes with the Thomson deal, ranked behind LG Philips Displays International Ltd., Samsung SDI Co. Ltd. and Matsushita Toshiba Picture Display Co. Ltd. However, the market for tubes is declining as flat-panel displays gain in popularity.