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Eveready hits 5% lower circuit on report Duracell plans to buy co's assets

The American firm will only own the Eveready brand in India and become owners of an annual installed capacity of 1.5 billion batteries and over 20 million flashlights per year.

SI Reporter  |  New Delhi 

Eveready

shares were locked in 5 per cent lower circuit at Rs 70.50 apiece on the BSE on Monday on reports that Duracell Inc, owned by Warren Buffett's Berkshire Hathaway, is set to acquire the company's battery and flashlight business in a slump sale for Rs 1,600-1,700 crore.

The deal includes manufacturing plants, distribution network and the Eveready brand, The Economic Times said in its report. The all-cash deal is in the final stages of negotiation and is expected to be announced soon, it said. The American firm will only own the Eveready brand in India and become owners of an annual installed capacity of 1.5 billion batteries and over 20 million flashlights per year.

The deal could help the company wipe out its debt, the report quoted a person as saying.

The B M Khaitan group has been in troubled waters for the past one year and its major firms — Eveready, McLeod Russel India, and McNally Bharat Engineering — have been trying to bring down the group level debt.

As per the report, both Duracell and the Williamson Magor group (Eveready's parent company) will leverage Eveready Industries’ existing distribution network and brand for their respective businesses.

Earlier in June, Price Waterhouse & Co Chartered Accountants LLP quit as auditor of Eveready, saying it has been unable to obtain sufficient audit evidence of inter-company deposits and its recovery.

Till 09:50 am, a combined 1.2 million shares of the company changed hands on the NSE and BSE and there were pending sell orders for 2,60,000 shares on both the bourses. Meanwhile, Williamson Magor hit 10 per cent upper circuit at Rs 17.65.

First Published: Mon, September 09 2019. 10:30 IST
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