Extension of product offerings: - Welspun is already a force to reckon with in Towels, Bed Linen and Decorative Beddings. - Sorema products in Bath Rugs and Shower Curtains will enable a complete offering to the customer. - Resulting in Coordinated sales of Bed Sheets, Towels and Rugs - Enable New production facilities of bath rug in India - With this new relationship, Welspun will have facilities in India, Mexico, Portugal and in UK.
Knowledge Enhancement and sharing: - Sorema's experience and knowledge in marketing high value products in the European markets. - Sorema's experience and know-how of Bath Rug business - Utilization of combined knowledge and expertise of Welspun and Sorema - Synergies in reducing market expenses.
Management synergies: - Achieve economies of scale in administration & marketing and also reduced inventories.
On the prospects, rationale and outlook post the transaction, Mr. BK Goenka, Vice Chairman and Managing Director of the Welspun Group commented: “This acquisition is an extremely important one for Welspun and strengthens our commitment towards achieving our goal of becoming a globally relevant holistic player in the Home Textiles segment.
Sorema's experience of specialty bath products complements Welspun's established capability and reach in the European market,” he adds.
Mr. Mandawewala, Joint Managing Director of Welspun India Ltd, and now new Chairman of Sorema said: “With the acquisition of Sorema, we are entering into the European market propelling us as one of the top players in the Home Textiles segment.
We are looking at leveraging their know-how through product development and marketing skills, combined with both Welspun and Christy knowledge thereby creating a platform for growth and strengthen all competitive positions”.
Mr. Duarte M. Relvas, Director of Sorema, commented, “This relationship represents an enormous opportunity for Sorema and we believe it is in the best long-term interests of the business.
It will give us the greatest scope for future development, with access to Welspun and Christy's research and development capabilities and international presence. Welspun's ethos complements our own commitment and we expect to develop new opportunities in both products and markets.”
As part of the acquisition, the existing Sorema management will continue to own the remaining 24% of the issued share capital and will operate Sorema on a stand-alone basis, with the exception of Mr. Rajesh Mandawewala (Joint Managing Director of Welspun), who is being appointed Chairman of Sorema by the Welspun board.
As a consequence of the acquisition, Sorema is a subsidiary of Welspun and all current employees will continue with the same terms and conditions of employment.
The Welspun Group engaged Ernst & Young (India) to carry out the due diligence of the Company. Sorema was represented by Garrigues Portugal, S.L. (Portugal).
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