Philips buys Preethi

Philips buys Preethi to grow in South India:

                

Philips has agreed to buy South Indian home appliances brand Preethi for over Rs 350 crore in one of the largest M&A transactions in the intensely-competitive home appliances market in the country. The deal involves the purchase of the Preethi brand along with manufacturing facilities and after-sales divisions. Maya Appliances, which makes and owns the Preethi brand name, will continue to function as a separate company.

Preethi mixers are a popular brand in the South and Philips will get access to a large market with dedicated plants and after-sales service. The Indian mixer market is estimated to be around Rs 1,400 crore and around 4.8 million units are sold every year. Preethi alone sells around 1.6 million units. Preethi, which has been trying to expand in the north and west, will be able to do so, riding on Philips’ dealer network.

The deal is expected to close by the first quarter of next fiscal. Maya Appliances reported sales of Rs 300 crore for the year ended March, 2010 and plans to touch Rs 400 crore this fiscal. Preethi was established in 1978 and 850 employees work on the brand. The brand has seen double-digit revenue growth for several years.

Since launching Their first products over 30 years ago, Preethi has grown into one of the most successful and trusted kitchen appliance brands in India. 

Now Maya Appliances have an even brighter future with Philips. The combined strength two organisations will benefit both their customers and employees.

To capture growth in kitchen appliances, Philips need to intimately understand local consumer needs and deliver the right solutions. By building on Preethi’s unique local knowledge, heritage of quality and substantial distributor and dealer network, They are well positioned to drive growth in one of the world’s most dynamic kitchen appliance markets.

Philips will also use Preethi’s manufacturing facility to make some other products. The brand was manufactured from seven locations - four in Himachal Pradesh and three in Tamil Nadu - and is now planning to set up one more near Chennai with an investment of Rs 30 crore.