Havells to buy Lloyd consumer arm for Rs 1,600 crore

Deal snapshot and why it matters

Havells India has agreed to acquire the consumer durable business of Lloyd Electric & Engineering for an enterprise value of INR 1,600 crore. The transaction gives Havells entry into consumer durables, expanding beyond its core electrical products portfolio. The acquisition includes both the operating business and the brand-related rights. Havells said it will acquire the Lloyd brand, logo, trademark, goodwill and other attendant rights. The deal was positioned as part of Havells’ stated strategy of going “Deeper into Homes” and building a more brand and distribution-led consumer franchise. The agreement was signed with Lloyd Electrical and Engineering Ltd and Fedders Lloyd Corporation Ltd, which co-own certain Lloyd consumer durable brand rights. The transaction was initially described as subject to confirmatory due diligence and closing adjustments.

What Havells is acquiring from Lloyd

Havells said it will acquire the entire consumer business infrastructure, people and distribution network of Lloyd’s consumer durables division. The scope includes sourcing, assembling, marketing and distribution of products such as air-conditioners, televisions, washing machines and other household appliances. Beyond operations, the acquisition covers absolute and exclusive ownership and rights to the intellectual property linked to the Lloyd brand. That includes the logo, trademark, goodwill and related rights. Havells also described the acquisition as being on a debt-free, cash-free basis, subject to closing adjustments. In one disclosure around the deal structure, it was stated that any debt in the division at transfer as a going concern would be deducted from the INR 1,600 crore transaction value. The consumer durables division being acquired was referred to as the Lloyd Consumer Durable Business Division (Lloyd Consumer).

Valuation, structure, and closing timeline

The deal was announced with an enterprise value of INR 1,600 crore. Havells indicated the transaction was expected to close in the next eight weeks from announcement, subject to due diligence. The company also stated it would not raise any fresh equity to fund the acquisition. Executives said the transaction might require approval from the Competition Commission of India (CCI). Separately, Havells later said it had obtained requisite approvals from relevant authorities for completing the transaction. The acquisition has also been described as executed on a debt-free, cash-free basis. In addition, the acquisition was described as being done on a slump sale basis.

Funding plan: internal accruals, cash balances, and debt

At the time of announcement, Havells said it planned to finance the acquisition through a mix of debt and internal accruals. In one media interaction, Chairman and Managing Director Anil Rai Gupta said Havells could raise anywhere between INR 500 crore and INR 700 crore as debt to fund the deal. In another report, he indicated a broader band of INR 600 crore to INR 800 crore of debt along with internal resources. One report also noted that Havells had about INR 1,400 crore cash and no debt, and that it planned to raise some debt and use the rest from cash. After completion, Havells stated that the acquisition was financed through internal accruals and cash balances. This suggests that the final funding mix leaned on internal resources at closing.

Lloyd Consumer’s scale: revenue and market presence

Lloyd’s consumer durable arm, Lloyd Consumer, reported revenue of INR 1,242 crore for the nine months ended December 31, 2016. The same business was expected to reach about INR 1,850 crore for the full fiscal year, as stated in the deal coverage. The acquisition also brings a wide distribution and service footprint. Havells was expected to gain access to a 10,000-plus direct and indirect dealer network spread across India. The service network cited around the deal included 485 authorised service centres and 31 company-owned service centres. For Havells, these assets matter because consumer durables in India are typically won on distribution reach, after-sales capability, and brand recall as much as product pricing.

Integration details: employees and operating model

Havells’ acquisition disclosures included operational details beyond the headline value. In one statement, it was said Havells would absorb about 800 to 900 staff from Lloyd under the deal. Another operational point disclosed was that Havells would use Lloyd as an OEM (original equipment manufacturer) for at least two years and potentially longer. This indicates a phased integration approach where manufacturing or sourcing arrangements could continue while brand, distribution, and portfolio are aligned under Havells. The company also indicated that Lloyd Consumer would remain a division of Havells and that the Lloyd brand name would be preserved. That brand continuity is relevant because the transaction explicitly includes ownership of the Lloyd brand’s IP.

Market and investor context around the announcement

The acquisition was framed as giving Havells a foothold in the consumer durables segment, which was estimated at about $15 billion and described as growing in double digits with increasing urbanisation. One report noted that on February 20, the day after the acquisition was announced, share prices of both companies fell on the Bombay Stock Exchange. No percentage move was provided, but the reaction was cited as negative on that day. In commentary around the acquisition, it was also stated that the cost was considered fair because Havells gets an entry into the fast-growing consumer durables segment. The company said it expected the transaction to support its domestic expansion goals.

Advisory roles and regulatory process

Havells’ disclosures named Standard Chartered Bank as financial adviser and AZB & Partners as legal advisers. EY was cited as financial adviser to the sellers. On approvals, Havells later stated it had obtained requisite approvals from relevant authorities for the transaction. Around the time of the original announcement, company executives also said the acquisition might require CCI approval. The deal was also described as subject to confirmatory due diligence.

Key facts table

Completion update and what changes for Havells

Havells subsequently announced the successful completion of the acquisition at the same enterprise value of INR 1,600 crore on a debt-free, cash-free basis. The company said it had acquired the consumer business infrastructure, people and distribution network, along with the Lloyd brand’s intellectual property. It also said the transaction was financed through internal accruals and cash balances at completion. CMD Anil Rai Gupta said the acquisition would help Havells gain a foothold in the high-growth consumer durables segment and offer a wider product range to consumers. With Lloyd’s air-conditioners, TVs and washing machines added to Havells’ domestic appliances such as fans, water heaters and lights, Havells becomes a broader consumer durables player. The deal was announced in February and later completed after required approvals were obtained.