Crompton and Butterfly announce merger

Crompton Greaves Consumer Electricals Ltd. (Crompton) and Butterfly Gandhimathi Appliances Ltd (Butterfly) announced a merger on Saturday evening. 

The merger is expected to accelerate the business and convergence of public shareholders of Butterfly at a parent level. The public shareholders of Butterfly as of 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. 

Further, the company informed in a stock exchange filing that after the merger the public shareholders of Butterfly will hold ~3 per cent stake in the combined entity.

The scheme is subject to the necessary statutory and regulatory approvals including the approval of the stock exchanges, SEBI, the respective shareholders and creditors of each of the companies and NCLT (Mumbai and Chennai benches).

Strategic step

“The merger is an important strategic step in the company’s journey and will help unlock the full potential of the combined businesses. It will enable faster execution of our Go-To-Market strategy and enable a greater focus on product innovation. We are confident that this will create significant value for all of our stakeholders,” said Shantanu Khosla, Managing Director – Crompton.

“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,” said Rangarajan Sriram, Managing Director of butterfly

Crompton which is more than 80 years old is India’s market leader in the category of fans and residential pumps. Over the years, the company has produced products including high-performance water heaters, anti-dust fans, antibacterial LED bulbs and a range of other categories like air coolers, food processors like mixer grinders, electric kettles and garment care like irons.