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| Deals cooking up at Indian kitchens |
| Reghu Balakrishnan / Mumbai Jan 11, 2012, 15:59 IST |
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Kitchens at Indian houses are on way of transformation. Hence, more merger & acquisitions (M&As) are taking place among kitchen appliances majors in order to tap the fast growing market. According to experts, changing lifestyle at Indian houses bring more attention to kitchens causing MNCs eyeing strong foothold through M&As or partnerships.
In one of the significant deals, French home appliance maker Groupe SEB had acquired 55 per cent in Maharaja Whiteline, the Delhi-based electrical appliance maker last month. In January 2011, global major- Philips had strengthened its Indian presence through buying out Maya Appliances that sells its products under the Preethi brand. Though deal size is not disclosed, buzzes say deal was clinched at Rs 400-450 crore.
Deepesh Garg, Managing Director, O3 Capital, said, "The consumer appliances segment in India is growing at 30 per cent plus CAGR and is still fragmented for historical reasons. This clearly, provides an opportunity for 2-3 large players to create leadership positions especially in segments like kitchen appliances.”
According to data from VCCedge, about 4 M&A deals took place in kitchen appliances space last year, against zero deals in 2010 and 2009.
| List of Deals In Home Appliance & kitchen Space In 2011 |
| Date |
Target |
Buyer |
Deal Value ($ mn) |
| 19/12/2011 |
Maharaja Whiteline Ind |
Groupe SEB |
- |
| 28/11/2011 |
Aran KitchenWorld India |
Kreon Finnancial Services |
- |
| 30/09/2011 |
Triveni Bialetti Ind |
TTK Prestige |
6.05 |
| 24/01/2011 |
Preethi Brand |
Koninklijke Philips Electronics NV |
76.28 |
| Source: VCCedge |
TT Jagannathan, chairman, TTK Group, one of the leading players in Indian industry, said, “The concept of Indian kitchen has changed completely. From an old concept of a small corner room, kitchen is moving to the central of the houses. The increased individual interests on cooking causes entry of more MNCs by launching modern equipments in Indian kitchens.”
TTK Prestige Ltd, the maker of cookers and kitchen appliances, had announced plans to buy Italian firm Bialetti’s ailing Indian unit, called Triveni Bialetti Industries, to expand production capabilities.
“There are a lot of foreign players interested in Indian kitchen appliances market and at least 20 players are in talks with us for the entry,” Jagannathan added. However, he refused to disclose further details.
Agrees Garg, “There is a lot of inbound interest in the space from large global players who are keenly looking to acquire platforms in the growing Indian markets that can provide them access to regional or pan-India distribution, local management talent and relatively strong brand recall with the consumers.”
Last month, Kreon Financial Services Ltd, a Non Banking Finance Company (NBFC) based in Chennai, acquired controlling stake in Indo-Italian joint venture firm Aran KitchenWorld India Pvt Ltd. Aran KitchenWorld is a joint venture between Italian modular kitchen firm Aran World and Chennai-based Bohra Kitchens of Bohra Group, with 49 per cent and 51 per cent stake holdings respectively.
Apart from the global majors, private equity investors are also coming in to tap the booming market in India.
Mayank Rastogi, partner, private equity and transaction advisory services, E&Y, said, “This is an interesting category for investments as it has all the attributes that an investor looks for - replacement demand, GDP growth playing into increasing the target consumer set as well as greater spending power with existing consumers, scope for consolidation and roll ups in the industry and ability to differentiate through brands.”
In 2010, Stovekraft Pvt Ltd, which operates through Gilma and Pigeon brands, raised funds from Sequoia Capital and SIDBI Venture Capital.
Last month, Fisher & Paykel Appliances, a New Zealand high-end kitchen appliances brand, entered the Indian market, by joining hands with with Shivam Industrial Corporation as its retail distributor. Similarly, the US-based $2.6-billion consumer durables firm Westinghouse Electric Corporation entered Indian by launching its kitchen appliances in last November.
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