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Butterfly Gandhimathi acquisition to help become leading kitchen appliance brand: Crompton Greaves

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Butterfly Gandhimathi acquisition to help become leading kitchen appliance brand: Crompton Greaves

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Shantanu Khosla, Managing Director, Crompton Greaves Consumer Electricals Limited, on Thursday, said that acquiring Butterfly Gandhimathi will help the company to expand its reach. He further explained that the company’s target is to be a leading brand in kitchen appliances segment and also become the best-in-class from a cost perspective as well.

Shantanu Khosla, Managing Director, Crompton Greaves Consumer Electricals Limited, on Thursday, said that acquiring Butterfly Gandhimathi will help the company to expand its reach. He explained that the company’s target is to become a pioneer in kitchen appliances segment and also have the best-in-class cost as well. Elaborating further, he said that small appliances are Butterfly’s forte, and going ahead, it will form 20-25 percent of the company’s business in the future.

"Butterfly is a very strong brand in the small appliances space. On a national basis, they have about 10 share of this Rs 8,000 crore market with particular strength in the South. This immediately gives us scale with the Butterfly brand to quickly transform our business in this category; it will immediately become 24-25 percent of our total business. Though, we're talking about small appliances right now, this is a play in the kitchen. In the long term, we see a huge opportunity in becoming the leading brand in kitchen appliances. We do aim to become the best-in-class from a cost point of view," he said.
Crompton Greaves Consumer Electricals Ltd has announced the acquisition of a controlling stake in Butterfly Gandhimathi Appliances Ltd. The company will acquire up to 55 percent stake in Butterfly Gandhimathi Appliances at Rs 1,403 per equity share, aggregating up to Rs 1,379.68 crore.
It will also acquire certain Butterfly trademarks in allied and cognate classes from promoter group entities for a consideration of Rs 30.38 crore.
The company will be launching a mandatory open offer to Butterfly’s public shareholders for acquiring up to 26 percent stake in the latter at Rs 1,433.9 per equity share.
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Khosla explained that the company’s objective is to grow its market share. In fact, he shared their intent of growing faster than market rate. According to him, Crompton is in a better position to make marketing expenses than Butterfly. He highlighted that the company will be stepping up its investments in innovation to meet product supply needs.
"Our objective is to grow share from a 10-11 percent share now; we aspire to establish leadership position with respect to our share, which means that our numbers and goals would have to grow faster than the market on a sustainable basis," Khosla said.
"Given the increased scale and the financial capability of Crompton, we are in a better position to make investments in marketing and innovation towards consumers than Butterfly was. So the two coming together now puts us a stronger position to grow. So we will continue to invest and step up investment over time in marketing, innovation and consumer understanding. And finally as the business grows, we will continue to invest in capex to meet product and supply needs as well," he added.
Watch the video for the full interview
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