Khaitan On Merger Spree To Stay Ahead Of Rivals

Seven group companies have been merged over just 24 months into three corporate entities.

There has also been talk of a merger between two other group associates, foil maker India Foils and subsidiary Light Metal Industries.

The group's focus has been in areas as diverse as tea to foils, and from engineering to storage batteries. Power is another prospective segment for the Calcutta-based group.

A number of these new non-tea areas have come about due to astute and sometimes expensive acquisitions.

With the submergence of the McLeod Russel name into the stronger Eveready, the Khaitans will have reduced two of the biggest names in the tea industry to virtual non-existence.

 

Williamson Magor was earlier a major tea industry player, but has now been reduced to an investment-cum-holding company, with its tea operations largely shifted to other group companies.

Through some previous mergers, already, McLeod Russel has consolidated a number of smaller tea estates into itself.

The company acquired nine tea estates (excluding tea processing factories but including certain assets and liabilities) from Makum Tea Co (India), Namdang Tea Co (India), Bishnauth Tea Co and Williamson Magor & Co.

Khaitan, a trader in his early life, joined tea export major Williamson & Magor, as it was then called, as a partner in the 1950s.

In 1975, Khaitan merged Williamson & Magor with McNeill & Barry to form one of the country's largest tea companies.

Thereafter he went on to acquire cash rich companies like India Foils, McLeod Russel, George Williamson, Standard Batteries and finally in 1994, Union Carbide, which was renamed Eveready Industries.

The group also has in its fold several closely-held engineering companies. However, their performance has not been something to write home about.

Barring India Foils, and its subsidiary Light Metal Industries, there have not been major technical inputs in the group.

Light Metal, Industries, till recently a loss making company, has been able to register a profit in the last fiscal.

A merger of these two metal companies is also a possibility in the foreseeable future.

But company sources claim that will not take place till the accumulated losses of Light Metal are wiped out.

That is likely to take an additional two years.

Khaitan had also entered into an arrangement with Metal Box Plc in 1986 to manage the affairs of its Indian operations. He acquired 7 per cent stake in the company and pumped in Rs 4 crore.

But he soon realised that Metal Box was sinking fast and offloaded his entire stake in 1988. But his Metal Box episode was not altogether a liability.

The plastic packaging unit of Metal Box, that Khaitan acquired, is now a major cash earner for India Foils.inc"-->