Videocon Bids To Acquire Motorola's Mobile Handset Biz

[@ksh@T 20]

NEW DELHI: Consumer electronics major Videocon Group on Tuesday said it has bid to acquire Motorola Inc's global mobile handset business.

"Yes, we have sent them an expression of interest to acquire their global mobile handset business. It is in the initial stages and will take time but we are the only one from India to do so," Videocon Group Chairman Venugopal Dhoot told media.

He said the company's move to acquire Motorola's mobile phone business was in line with its expanding interest in the mobile telephony business. "We have already got licenses for offering GSM-based mobile services in all 22 circles in India and we see a synergy," Dhoot added.

Asked what could be the value of the deal he said, "It is too early to talk about numbers".

When contacted, a Motorola India spokesperson declined to confirm the development saying "we do not comment on market speculation".

According to reports, Motorola's non-profitable handset business has been estimated to be worth about 3.8 billion dollars as evaluated by Merrill Lynch.

While Videocon itself is on the prowl, US telecom giant AT&T is eyeing a stake in its subsidiary Datacom, which has been issued a license recently for mobile services throughout India.

However, the deal is expected to take shape only after the government allocates spectrum for wireless telecom services to new players, as a mere license may not fetch a good value.

Datacom is first in the list to get spectrum, except in Delhi and Mumbai, as and when the government starts allocating the radio frequency.

Datacom has announced an investment of Rs 6,000 crore for a pan-India network expansion in the first phase. It has also been approached by another foreign player Telephonica of Spain.

Videocon in the past has been active in acquiring consumer durable firms across different geographies. It had acquired Thompson's colour tube business and AB Electrolux' Indian subsidiary, but failed to acquire Korea's ailing electronics firm Daewoo.

[Dj 25]

interesting... heard this on cnbc tv18 also today...

[Dj 25]

CNNMoney.com

NEW YORK (Fortune) -- Motorola may have just had its worst week ever.

It started with a joyless plan to jettison the mobile phone business last Wednesday. The announcement pushed the stock to a four-year low. That play was followed by a forfeit - a glaring absence of new phones at the wireless industry's event going on now in Las Vegas. But the crowning achievement of the week has to be an unsolicited, and so far unacknowledged offer for the phone unit from Videocon, a big consumer electronics company in India.

The news that the suitor wasn't exactly Nokia (NOK) or Sony Ericsson or even China's ZTE brought home a message that many Motorola (MOT, Fortune 500) watchers have already come to uncomfortable terms with: The once proud phone giant has fallen to bargain basement levels.

Some observers have even gotten to an actual estimated dollar value for the money-losing phone business, if Motorola were to spin it off. Money manager-cum-blogger Chad Brand wrote Monday that the remaining businesses, like set-top TV boxes, wireless infrastructure and the walkie-talkie operations, would trade for about $8 a share. At the time, Motorola' stock price was hovering around $9, meaning the phone business was worth roughly $1 a share.

At these prices, it's probably not terribly surprising that some far-flung potential bidders have taken an interest in the No. 3 phone maker.

There was no dollar value attached to the Videocon inquiry, and chairman Venugopal Dhoot did not immediately reply to an e-mail. Videocon's most recent takeover plays include a failed bid for South Korea's Daewoo electronics, the successful acquisition of Thomson's cathode ray TV tube business and the purchase of Electrolux's India unit.

To be sure, India is a rising player in the global market. The recent $2.3 billion deal by Tata Motors (TTM) to acquire Ford's (F, Fortune 500) Jaguar and Land Rover units is the most recent illustration of the growing financial power of India's industrialists. But in this case, Tata has some experience in the auto industry with 22 years of car manufacturing.

If nothing else, Videocon's ambitions are high. The company plans to launch a wireless phone service by year end and hopes to have 20 million customers in four years, Dhoot told Bloomberg in an interview earlier this year. But Videocon will need substantial financing to swing a deal for Motorola's handset operation, even at these prices. Notably, its $711 million bid for Daewoo was ultimately rejected by creditors.

Next week could bring more offers. But this being Motorola, it could also be the even worse week ever

_______________________________________

Apologies for having posted it as a new topic...

Edited April 2, 2008 by Dj

[@ksh@T 20]

Videocon picks UBS as advisor for Motorola handsets deal

NEW DELHI: Consumer electronics giant Videocon has named global financial services firm UBS as its investment banker to strike a deal to acquire Motorola's mobile handsets unit, the group's chief has said.

"I have thrown my hat in the ring. And they will say it is a good hat as it is an Indian hat," Venugopal N. Dhoot, the chairperson and managing director of Videocon, told reporters on the sidelines of a conference on trade pacts here.

"UBS are our bankers," said Dhoot, while declining to divulge financial details. "We have sent our expression of interest to Motorola. In the US, it takes about a year for necessary regulatory approvals to take place."

Earlier this week, the Mumbai-based consumer appliances and electronics giant had announced plans to acquire Motorola's loss-making mobile handset unit.

"It may be a serious business for us since we have got mobile phone licences for 22 circles in India. Apart from that, we have our own retail network with about 1,000 shops where we sell mobile phones," Dhoot said.

Videocon is well positioned for a bid that can be financed from both internal accruals and debt, added Dhoot, also president of the Associated Chambers of Commerce and Industry (Assocham).

Motorola is world's third-largest mobile phones maker behind Finland's Nokia and South Korea's Samsung, and had had expressed its desire to split its loss-making subsidiary into a separate firm with its own listing on the stock market.

But the Schaumburg, Illinois-based firm did not make any comment so far on any proposal to sell the unit to Videocon.

In 2005, Videocon acquired the picture-tubes business of France's Thomson for $291 million. It had also made an unsuccessful attempt at South Korea's Daewoo Electronics in 2006.

India is the world's fastest growing market for wireless subscribers, adding more than eight million users a month. With some 251 million wireless users it is expected to surpass US as the world's second-biggest market, led by China.