SHARP BUYS INTO INDIA’S BIG DEALERSHIP

[Anonymous]

Done deal: Sharp to buy out L&T’s 26% stake in JV

NEW DELHI: Larsen & Toubro (L&T) is selling out its entire equity stake in its joint venture Sharp Business Systems (SBSIL) to Sharp. L&T currently holds 26% in the 74:26 JV which is engaged in the business of office IT products including fax machines, copiers and printers. This completes the sale of L&T’s electronic office equipment business. The JV was set-up five years back when L&T converted its electronic office equipment division into a separate company in partnership with Sharp as a majority shareholder. The equity holding was retained at the same level all this time. According to sources, the Japanese electronics giant Sharp will acquire the balance 26% equity which comprises of 23.4 lakh shares of Rs 10 each. The deal amount stands undisclosed. SBSIL, generates sales of Rs 60 crore in the country and with some aggressive marketing and distribution strategy is hoping to clock 20% growth in its topline. The company’s product portfolio in India includes digital copiers & printers, facsimile machines and multi-media projectors. While digital copiers & printers contribute over 50% of the total turnover, the facsimile machines contribute 15% and the balance 35% business comes from projectors. When the JV was formed it absorbed L&T Electronic office equipment business including select assets, employees and existing dealer network and facilities. The plan also included launching hi-tech digital office products apart from providing software based solutions for the industry, small and big enterprises and home offices in India. The condition being that the domestic trading activities of the company shall be confined to bulk imports with ex-port and ex-bonded warehouse sales and cash and carry wholesale trading. SBSIL markets its products through a chain of more than 200 dealers across the country. It is developing IT distribution as a full-fledged channel with focus on both metros as well as non-metros.

[Author]

May 23, 2005 at 12:28 PM