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Advent-led consortium to buy consumer arm of India’s Crompton Greaves-Reuters

(Reuters) – The holding company behind India’s Crompton Greaves Ltd has agreed to sell the group’s consumer electricals unit for 20 billion rupees ($316 million) to Advent International Corp and a unit of Singapore’s Temasek Holdings.

Holding company Avantha and private equity firm Advent said in a statement on Friday the buyers would take a 34.37 percent share, with the remainder to be listed on the market. The deal gives Crompton Greaves Consumer Electricals an enterprise value of 66 billion rupees ($1.04 billion).

The board of Crompton Greaves, a conglomerate whose activities stretch from power transmission equipment to fans and air coolers, approved a plan in March to hive off its consumer products business into a separately listed company.

The consumer electricals unit will be first demerged into a standalone company and will list. Advent and Temasek will then make an open offer for additional shares in compliance with takeover rules, the companies said in a joint statement.

“CGCEL is an attractive business that we believe will thrive as a standalone company,” said Shweta Jalan, managing director at Advent International in Mumbai.
Crompton’s consumer electrical unit has grown at a compound rate of 16 percent per year over the past six years and generated revenue of 28.5 billion rupees for the fiscal year ended March 31, 2014, the company said.

Crompton Greaves shares fell as much as 7.7 percent after the announcement and were down 2.4 percent at 0600 GMT as traders worried that the price fell short of market expectations.