Japanese conglomerate Toshiba Corporation and Vijai Electricals Ltd. (Vijai) have announced that they have agreed to Toshiba's acquisition of the major part of Vijai's electricity transmission and distribution (T&D) business for approximately $ 200 million (Rs 1,300 crore).
The acquisition will be completed in November 2013. Post the deal, the $ 61-billion Toshiba will establish a new company that will absorb the acquired business, and also integrate Toshiba's design and manufacturing technologies for T&D systems.
“The acquisition is necessary for our global T&D strategy, and Vijai's products and sales channel provide us with an ideal fit for our T&D business in India and beyond,” Takeshi Yokota, Corporate Vice-President, Toshiba, said.
“It will support us not only in the Indian market, where we aim to secure a 20 per cent market share within five years, but in reinforcing our position in the global market, by strengthening our worldwide network,” he said in a statement.
Dasari Jai Ramesh, Chairman of Vijai Electricals, said, “We are proud that our technology strengths and people capabilities will become part of Toshiba Group and will provide them a powerful platform for their business growth and market expansion.”
The new company will tap other growing markets in India, including power electronics systems, such as high voltage direct current (HVDC) power transmission and static compensators for high voltage networks (SVC), and railway power supply systems.
Toshiba plans to position the new company as a core production base for expanding its T&D business in India and the global market.
Established in 1973, Vijai Electricals manufactures and sell electricity distribution transformers. This business has grown in strength due to high quality production capabilities. It has allowed it to gain share in the Indian market and foothold in Europe and Africa.
Vijai later expanded its T&D business in 2006 and entered the power transformer and switchgear businesses. It has manufactured and supplied the world's highest voltage class ultra-high voltage 1200 kV power transformer.
The T&D market size is expected to rise to over $4 billion by 2015.