How Crompton Greaves gain by acquiring Butterfly Gandhimathi?

Crompton Greaves is all set to purchase up to 55% equity stake in south-based Butterfly Gandhimathi Appliances for Rs.1,380 crore at a price of Rs.1,403 per share. Butterfly Gandhimathi is a very strong retail consumer appliances brand in the South and quite popular among south Indians residing in other parts of India. As part of the deal, Crompton will pay an additional Rs.30.38 crore for certain trade-marks of Butterfly.

In addition, Crompton Greaves Consumer will also launch the mandatory open offer to the other minority shareholders of Butterfly Gandhimathi to buy out another 26% stake at a price of Rs.1,433.90 per share valued at Rs.667 crore. If you sum up the two parts of the deal, Crompton will get 81% stake in Butterfly for Rs.2,077 crore. This will be a major boost to Crompton Greaves Consumer in the small domestic appliances segment.