Welspun India Ltd part of the US $ 1.5 billion Welspun Group and amongst the top 4 terry towel manufacturing companies in the World has acquired 76% interest in bath rug major Sorema Tapates e Cortinas de Banho, SA (Sorema) of Portugal at an enterprise value of Rs. 600 Million.
It is worthy to mention here that Welspun acquired 85% of UK's largest Towel Company Christy in July 2006 and has increased the business significantly in just more than a year's time.
Set up in 1974 with more than three decades of experience, Sorema is a leading player in bath rugs and shower curtains around the world with an annual estimated turnover of € 10 million (INR 570 million) in FY 07. With its network across 44 countries, USA, England, Spain and Germany constitutes 78% of Sorema's export.
Welspun and Sorema additionally signed an agreement for marketing of products exclusively in Spain and Portugal and on best-effort basis in other European countries. With this new relationship, Welspun will have facilities in India, Mexico, Portugal and in UK.
Synergistic Benefits of the proposed acquisition: The Board of Welspun and Sorema both believe that this relationship will realize significant synergistic benefits for both businesses considering their complementary strategies and business profiles. These would include:
Stronger brand presence: - Access to premium and high-end Sorema brands which could be extended to other home products. - Sorema brands along with Welspun's owned and licensed brands (like Nautica and Umbra) and Christy, enhances presence in branded business. - Extension of Sorema brands to the Indian consumer through Welspun Retail Ltd.
Enhancement in market presence: - Complimenting Welspun's strong presence in US and UK with pan-European presence. - Sorema's marketing channels could be utilized for marketing Welspun products - Welspun's and Christy's marketing channels to be used for marketing existing Sorema products
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