GE Appliances has decided to sell off its entire 26 per cent stake in Godrej -GE Appliances, the white goods joint venture, to Godrej & Boyce.
The partners have entered into preliminary discussions, said a joint statement issued by the two companies last evening.
The release noted that the operating management structure of Godrej-GE appliances will remain unchanged.
According to market sources, GE's equity will be available to Godrej at a very low price as the move effectively means its exit from the appliances business in the country.
However, the decision is part of GE's global policy to focus on markets where it has a strong brand presence.
Jamshyd Godrej, managing director, Godrej & Boyce, said,
"We respect and understand GE's position."
Scott R Bayman, president and CEO, GE India, said, "This (move) does not, in any manner, diminish GE's commitment to India."
The sources said, recently GE was planning to hike its equity from 26 per cent to 40 per cent, but later decided against it. It had the option to increase the stake to 49 per cent.
Godrej sometime back had also appointed a separate person to improve the market share. But with the influx of the Korean majors, the competition toughened. Godrej-GE has the number one position in the refrigerator market, with a share of about 26 per cent.
Parting Ways
* GE Appliance will divest its stake in the joint venture with Godrej & Boyce, Godrej-GE Appliances.
* Godrej & Boyce will buy back the equity from GE at a very low rats as it effective means GE's exit from the appliance business in India.
* The operating management structure of Godrej-GE appliances will remain unchanged
* The decision follows the entry of Korean chaebols which have triggered a price war in the appliances market
