Simplifying corporate structure, converging public shareholders of Butterfly at the parent level and smoothly synergizing the combined business are major aims of the merger
Leading electronics companies in the Indian market, Crompton Greaves Consumer Electricals and Butterfly Gandhimathi Appliances recently announced a proposed scheme of amalgamation of Butterfly with Crompton. As per the official communication, after the merger, the public shareholders of Butterfly as on the record date will receive 22 equity shares of Crompton for every 5 equity shares held by them in Butterfly, as a consideration for the merger. Moreover, the public shareholders of Butterfly will hold ~3.0% stake in the combined entity. Both companies believe that the merger will unlock various revenue and cost synergies, help achieve economies of scale by pooling their combined resources and provide an impetus to grow pan-India. The official statement pointed out that the combined effort will enable a more efficient allocation of capital and result in the simplification of the corporate structure.
Considering it an important strategic step in the company’s journey, Crompton’s MD, Mr Shantanu Khosla opined that it will help unlock the full potential of the combined businesses. “It will enable faster execution of our Go-To-Market strategy and enable greater focus on product innovation. We are confident that this will create significant value for all of our stakeholders.”
Butterfly MD, Mr Rangarajan Sriram remarked, “The proposed merger will enable Butterfly to better leverage the pan-India reach of Crompton, integrate more closely with Crompton’s consumer appliances business and tap cross-selling opportunities. It will also provide greater avenues for growth and development of our people.”
The statement added that the proposed scheme is subject to the necessary statutory and regulatory approvals including the approval of the stock exchanges, SEBI, the respective shareholders and creditors of each of the companies and NCLT (Mumbai and Chennai benches).
Over 80-year-old Crompton Greaves Consumer Electricals Limited is a leading company in the category of fans and residential pumps. It has also come up with water heaters, anti-dust fans, antibacterial LED bulbs and a range of other categories like air coolers, food processors like mixer grinders, electric kettles and garment care like irons.
Butterfly is a leading manufacturer/marketer of domestic kitchen and domestic electrical appliances under the ‘BUTTERFLY’ brand. Products include LPG stoves, mixer grinders, tabletop wet grinders, pressure cookers, stainless steel cookware and non-stick cookware.