RR Kabel acquires Luminous' home electrical business from Schneider

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New Delhi: Wires and cables brand RR Kabel on Wednesday said it has acquired Luminous Power's home electrical business (HEB) from French engineering company Schneider.

This acquisition will further strengthen RR Kabel's consumer electrical business, which has a portfolio of fans, lights and appliances, company's Managing Director Shreegopal Kabra said while sharing updates about the deal in a virtual press conference.

The transaction is subject to closing adjustments and is expected to complete in May this year, said RR Kabel, part of RR Global, a USD 1.25 billion conglomerate.

In 2011, Schneider had acquired 74 per cent stake of Luminous Power and later in 2017, it acquired the balance 26 per cent.

When asked about the valuation of the deal, Kabra said both the companies are unlisted entities and have decided not to disclose the amount.

Luminous' HEB consists of fans and lights and would help RR Kabel enter into the premium segment of this category.

Under this category, Luminous recently introduced its series of energy-efficient star-rated premium designer fans in India.

As part of the deal, RR Kabel would have rights to use the Luminous brand for four years for the existing product lines of fans and lighting under a Brand Licensing Agreement, Kabra added.

Commenting on the development, RR Kabel CEO, Consumer (FMED) Business Vivek Abrol said after the deal, the company is now "reorienting" its target for the segment.

"Earlier, we had planned to touch a Rs 1,000 crore revenue in 3-4 years (from fan and light segment) and after this acquisition, it has been reoriented. Now we are aiming to reach Rs 2,000 crore in 5-6 years," he said.

RR Kabel has a revenue of Rs 300 crore from the fan and light segment. It is backed by the US private equity firm TPG Capital, which has invested in the company and owns a minority stake. Also Read: FD investors, ALERT! Public sector bank slashes fixed deposit interest rates by 0.40%

RR Kabel's overall revenue is around Rs 5,400 crore and the company expects to reach the Rs 10,000-crore mark in the next two years, said Kabra. Also Read: Bank Holidays: Banks to remain closed for 4 days from tomorrow -- Check important dates