'Crompton Greaves Consumer Electricals' And Kitchen Appliance Maker Butterfly Announce Merger

Crompton Greaves Consumer Electricals Ltd (CGCEL) and Butterfly Gandhimathi Appliances have announced a merger to accelerate and smoothen the realisation of synergies of the combined business. This will also simplify corporate and governance structure and convergence of public shareholders of Butterfly at the parent level and align interests for shareholders of both companies, said a joint statement. This would be based on a share swap, it added.

"Upon merger, the public shareholders of Butterfly as on the record date will receive 22 equity shares of Crompton for every 5 equity shares held by them in Butterfly, as a consideration for the merger," it said. Post-merger, the public shareholders of Butterfly will hold ~3 per cent stake in the the combined entity, it added. "The scheme is subject to the necessary statutory and regulatory approvals including approval of the stock exchanges, SEBI, the respective shareholders and creditors of each of the companies and NCLT (Mumbai and Chennai benches)," it added.

Shantanu Khosla, Managing Director, Crompton, said: "It will enable a faster execution of our go-to market strategy and enable greater focus on product innovation. We are confident that this will create significant value for all of our stakeholders." Rangarajan Sriram, Managing Director, Butterfly, said:

"The proposed merger will enable Butterfly to better leverage the pan-India reach of Crompton, integrate more closely with Crompton's consumer appliances business and tap cross-selling opportunities. It will also provide greater avenues for growth and development of our people." In February 2022 CGCEL had announced the acquisition of 81 per cent stake in Butterfly for Rs 2,076 crore. Tamil Nadu-based Butterfly Gandhimathi Appliances operates in kitchen and small domestic appliances.

(PTI)