Voltas divests 26% in JV to partner Electrolux - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Voltas divests 26% in JV to partner Electrolux

Dec 30, 1999

The Swedish white goods major AB Electrolux has finalised a deal with Voltas to take over its 26% stake in their joint venture Electrolux Voltas. The joint venture owns the brand names ‘Voltas’ and ‘Allwyn’ and is into the manufacture of refrigerators (capacity: 0.25 million units per annum) and washing machines (capacity 0.1 m units per annum). This gives A.B Electrolux (the Swedish company) its second vehicle of operations within the country. A.B Electrolux already owns a listed company (which owns the Kelvinator brand) wherein its former partners, the promoters of Maharaja Appliances hold a 26% stake. There have been occasions in the past where the special resolutions that the Swedish major wanted to introduce have been defeated.

While this buyout benefits the Swedish company as it now has total control over the JV, it does not in any way benefit the listed Indian company. It is also beneficial to the Swedish company as it has home appliance brands across the spectrum covering all segments. It is quite possible that AB Electrolux might increase its focus on this 100% subsidiary and launch new products or pass on technology to this subsidiary.

Though it is also possible that these two companies might merge in future the company has not yet announced any such intentions. The merger would enable the company to consolidate its position in the refrigerator market whether this will benefit the shareholders would largely be dependant on the valuation ratios at the time of merger.

For Voltas it is the culmination of a decision that was taken when the company decided to focus on air conditioning, engineering and chemicals and decided to exit from the home appliances business. However, Voltas sells its air conditioners under the ‘Voltas’ name itself. If the agreement with Electrolux allows them to continue with the brand name ‘Voltas’ for the air conditioners it will be a plus for the company since any promotion by Electrolux of the brand name will help Voltas. Further the cash infusion (the price of the deal is not known) will help the company to repay its Rs.180 million debt.

Market View: Analysts rate Voltas as a ‘Buy’ since the household appliance market which is going through tough times has been divested, while the company has the core competency to run the businesses that remain within the company successfully.

Equitymaster requests your view! Post a comment on "Voltas divests 26% in JV to partner Electrolux". Click here!

  

More Views on News

VOLTAS 2019-20 Annual Report Analysis (Annual Result Update)

Dec 14, 2020 | Updated on Dec 14, 2020

Here's an analysis of the annual report of VOLTAS for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of VOLTAS. Also includes updates on the valuation of VOLTAS.

VOLTAS Announces Quarterly Results (1QFY21); Net Profit Down 50.2% (Quarterly Result Update)

Sep 1, 2020 | Updated on Sep 1, 2020

For the quarter ended June 2020, VOLTAS has posted a net profit of Rs 934 m (down 50.2% YoY). Sales on the other hand came in at Rs 13 bn (down 52.1% YoY). Read on for a complete analysis of VOLTAS's quarterly results.

VOLTAS Announces Quarterly Results (4QFY20); Net Profit Up 11.1% (Quarterly Result Update)

Jun 1, 2020 | Updated on Jun 1, 2020

For the quarter ended March 2020, VOLTAS has posted a net profit of Rs 2 bn (up 11.1% YoY). Sales on the other hand came in at Rs 21 bn (up 1.3% YoY). Read on for a complete analysis of VOLTAS's quarterly results.

VOLTAS 2018-19 Annual Report Analysis (Annual Result Update)

Jul 18, 2019 | Updated on Jul 18, 2019

Here's an analysis of the annual report of VOLTAS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of VOLTAS. Also includes updates on the valuation of VOLTAS.

More Views on News

Most Popular

My Recent Recommendation Will Profit from the Global Supply Chain Crisis (Profit Hunter)

Mar 31, 2021

A tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.

My Stock Trading Strategy (Fast Profits Daily)

Mar 31, 2021

In this video I'll show you exactly how I go about picking stocks for trading.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

If the Market Falls, I Will Do This... (Fast Profits Daily)

Apr 1, 2021

What should you do if the market falls? In this video, I'll tell you what I will do.

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

VOLTAS SHARE PRICE


Apr 13, 2021 (Close)

TRACK VOLTAS

VOLTAS - ANSALDO STS COMPARISON

COMPARE VOLTAS WITH

MARKET STATS