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Videocon Eyes Motorola Mobile Handsets
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One of India’s oldest refrigerator company and most trusted electronic appliances company, Videocon has expressed an interest in bidding for Motorola’s mobile handset business. According to the sources, the discussions on the acquisition of the third largest mobile handset maker are on the cards within the Videocon stable.
With the current onslaught on increased spectrum allocation for the mobile service providers, a huge surge in the sales of mobile phones has been predicted by the industry pundits. It seems Videocon is very keen to cash in on such an increased demand and the idea of readymade flurry of mobile phones to fill up its retail stores and bundled with its to-be released GSM network is just too tempting to resist.
Motorola’s mobile phone business had been on a downhill for quite some time now. Although MotoRazr was hugely successful to give this dying phoenix a rebirth, the inability on Motorola’s part to follow up the revolutionary handset with better options seems to have killed the company on the whole. Investor Carl Icahn had been running after the idea of splitting up the handsets & accessories arm and wireless broadband & enterprise communication products for quite some time now and finally Videocon has decided to buy out the former arm to become the third largest manufacturer of mobile handsets in the world, after Nokia and Samsung.
If things work out the way Videocon plans, the company should be expected to move the manufacturing operations to India. It’s a win-win situation with Videocon since they have been one of the oldest companies in the country and it’ll hardly be a problem for them to set up new manufacturing units and take advantage of one of the lowest labor costs in the world.
Motorola’s mobile unit has been valued at around $3.8 billion by Merrill Lynch and a successful acquisition of the company by Videocon will be interesting to watch and analyze. In 2006, the Videocon had launched a joint bid to acquire Daewoo Electronics for 710 million dollars. However, the deal fell through when Videocon had asked for instalment payments in a span of 10 years.
Indian companies used to be more focused on the domestic market but have now started eyeing the global scenario, what with TATA Steel acquiring Corus and Tata Motors’ bid to acquire Jaguar and Land Rover. I guess, this what they’d termed “India Shining”, a few years back!
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