Shares of Crompton Greaves Consumer Electricals rose over 4% in early trade today after the firm inked definitive agreements to acquire up to 55% stake in Butterfly Gandhimathi Appliances at Rs 1,403 per equity share.
Crompton Greaves Consumer Electricals stock gained 4.69% to Rs 396.35 against the previous close of Rs 378.60 on BSE.
Crompton Greaves share has gained 2% in one year but lost 11% since the beginning of this year. Total 0.61 lakh shares of the firm changed hands amounting to a turnover of Rs 2.37 crore on BSE.
Market cap of the firm rose to Rs 24,423 crore on BSE.
The stock trades higher than 5 day moving averages but lower than 20 day, 50 day, 100 day and 200 day moving averages.
The large cap stock hit a 52 week high of Rs 512.05 on September 16, 2021 and a 52-week low of Rs 350.35 on April 23, 2021.
The transaction is worth Rs 1,379.68 crore. The firm will also buy certain Butterfly trademarks in allied and cognate classes from promoter group entities for a consideration of Rs 30.38 crore.
"Crompton will launch the mandatory open offer to the public shareholders of Butterfly, for acquiring upto 26% stake in Butterfly at a price of ?1,433.9 per equity share, aggregating upto ?666.57 crore; for an aggregate total consideration of upto INR 2,076.63 crore," the company announced in an exchange filing today.
The transaction will be subject to completion of customary closing conditions and is expected to be financed through a mix of internal accruals and debt.
The transaction will accelerate Crompton's long-term strategic goal of becoming a leading player in the small domestic appliances segment. Further, Butterfly's complementary product portfolio coupled with scale and channel synergies will drive robust revenue growth and profitability, the company said.
Butterfly is among the top 3 pan-India kitchen and small domestic appliances players. Its leading kitchen and small domestic appliances portfolio includes mixer grinders, table top wet grinders, pressure cookers, stainless steel vacuum flasks, LPG stoves and non-stick cookware. In FY21, Butterfly reported revenues of Rs 870 crore with EBITDA of Rs 80 crore.
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