Videocon to buy Finnish firm Elcoteq for $73 mn

Indian consumer durables major Videocon Industries has decided to buy Finnish company Elcoteq, engaged in contract manufacturing of mobile phones and other electronic items, in a deal estimated at around $73 million.

Although Videocon officials declined to comment on the deal, industry sources familiar with the company's plans said it will make the buyout announcement on Monday.

"Videocon is taking a controlling stake in Elcoteq for about $73 million and the transaction is expected to close by December," said a source familiar with Videocon's plans.

Meanwhile, Elcoteq said in a statement to its Stock Exchange that it has signed a "non-binding Letter of Intent with Videocon Industries, granting the authority to negotiate and finalize a potential Definitive Transaction Agreement".

It added that the two companies are "aiming at a rapid process to conclude the Agreement. The transaction is expected to close by the end of the year."

Elcoteq is expected to give a fillip to the Indian company's growth plans in the area of wireless technologies. Videocon group has revenues of around Rs 15,000 crore, majority of which come from consumer durables business and the rest from oil and gas.