Racold Sells Stake To Italys Merloni

Racold Electrical Appliances, manufacturer of Racold water heaters, has ceased to exist and has sold its stake to Merloni Termosanitari Group of Italy.

The Racold brand name as well as the assets have been vested in a joint venture between Racold and the Italian group. The venture has been christened Merloni Termosanitari (India) Ltd (MTS). Racold has a minority stake of 26 per cent in the venture.

The two companies disclosed this at a press conference yesterday. Valerio Fedeli, managing director of the $3.5 billion MTS group said , India represents a very big opportunity. We will introduce and promote products for Indian needs.

 

Racold chairman Ved Kapoor , however, refused to spell out the terms under which the company's stake had been sold. All that he said was the new company had a paid-up share capital of Rs 30 crore.

"This is a preemptive move. Merloni or some other foreign company would have come into India anyway," he added.

The Racold brand will be kept intact as it enjoys tremendous brand equity.

Fideli said that the products introduced by the company in the middle end of the market will be sold under the Racold brand name.

However, the company will introduce the top end of the market water heater under the brand name Ariston, which is Europe's largest selling water heater.

MTS will also introduce gas water heaters in India. Initially, the accent will be on promoting Racold.

Fideli said that the aim was to increase Racolds market share to 50 per cent, from the present 33 per cent, in the next few years.

MTS is setting up a state-of-the-art plant at Pune to manufacture water heaters and will invest about Rs 30 crore in the next five years.