French building materials maker Saint Gobain will acquire Electrotherm (India) Ltd's ductile iron pipes business for Rs950 crore ($176.9 million), in a bid to strengthen its global pipes business.
In a filing with the Bombay Stock Exchange, Electrotherm said, "Electrotherm had today executed binding agreement pursuant to which Saint-Gobain Pour La Construction SAS will acquire Electrotherm's Ductile iron pipes business for Rs 950 plus the value of working capital at closing.''
"The transaction will enable Electrotherm to focus on its core businesses of engineering and steel and also reduce debt," Avinash Bhandari, joint managing director of Electrotherm, said in a statement.
With 715 employees, Electrotherm's pipe division had 2010 sales of Rs549 crore. It has two production sites in Gujarat and Karnataka.
Saint Gobain said that the acquisition will strengthen its global pipe business.
With a turnover of Rs2,300 crore, Gandhinagar, Gujarat-based Electrotherm is India's largest manufacturer of induction melting furnace and refining equipment. It has also diversified into steel manufacturing, electric vehicles business and renewable energy.
It makes the popular YObyke electric scooters and is setting up wind farms and solar power plants and is also planning to introduce electric three-wheelers and hybrid buses.
Founded in 1665 under the direction of French minister of finance Jean-Baptiste Colbert during the reign of King Louis XIV, Paris-based Saint-Gobain today is the world's largest construction, building materials and glass company. Located in 64 countries and with 2010 revenues of €40.12 billion, Saint-Gobain is a world leader in habitat, designs, manufactures and distributes building materials. It is also the world's largest manufacturer of high performance plastics.