The French company, Legrand Group Friday announced it had proposed an offer for the acquisition of Indo Asian Switchgear division from its parent company the Indo Asian Fusegear Limited. The company said the proposal had gotten overwhelming approval from the company’s board of directors but would still have to get corporate approval.

With the offer for the investment, Legrand hopes to be able to considerably expand its presence in India, a fast growing market, in which the French company expects to produce around 4% of its yearly sales. The company has had an impressive record of organic growth in the burgeoning market, reporting to have recorded a steady average organic growth of 19% for the last fifteen years.

Indo Asian Switchgear manufactures safety devices such as miniature and residual current circuit breakers, distribution boards, relays amongst others. The products are geared at the retail market for which the company is one of the leading players.  In India, the Legrand Group has robust position with regard to high value added safety systems that are most commonly used in project business and premium wiring gadgets.  With 2010 sales that should exceed €35 million and an operating margin in double digits, Indo Asian Switchgear is based near New Delhi and employs approximately 2000 people at three sites.

Legrand Group said it had made an offer of Rs 600 crore as its cumulative consideration but will acquire the switchgear business from Indo Asian for about Rs 495 crore. Other than that, the French electrical appliances manufacture will remit a one time amount of Rs 35 crore as non-compete fee to Indo Asian covering five years.

The deal will also see the French Group remit another Rs 35 crore to the Indian company’s supporters as a non-compete fee and acquire all the switchgear brands owned by Indo Asian Marketing for another Rs 35, said a statement the company sent to the Bombay Stock Exchange. Indo Asian Fusegear chairman, V.P Mahendru said its board of directors had unanimously approved Legrand’s offer but noted that Indo Asian Fusegear will retain its other business in the lighting, wires and cables segments.

Furthermore, he added that Indo Asian Fusegear is also considering opportunities in advance lighting systems and energy conservation products. The company’s board of directors is expected to announce dividend recommendations to its shareholders from the profits that will accrue from this sale. Legrand is the global specialist in electrical and digital building infrastructures.

Tags: FDI India, foreign investment in Manufacturing, Foreign Investment India, India investment, investment news India, investments India, Manufacturing Companies, Manufacturing India, Manufacturing investment, Manufacturing news, Switchgear manufacturing

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