<p>The Finland-based company makes gadgets like mobile phones and set-top boxes for companies like Sony Ericsson, Philips and Cisco.<br /><br />"Elcoteq has signed a non-binding Letter of Intent with Videocon Industries Ltd, granting the authority to negotiate and finalize a potential Definitive Transaction Agreement," Videocon said in a filling to the Bombay Stock Exchange.<br /><br />It added that the two companies are "aiming at a rapid process to conclude the agreement. The transaction is expected to close by the end of the year."<br /><br />Videocon officials declined to discuss the agreement's details, but industry sources familiar with the company's plans said it is working on taking a controlling stake in Elcoteq.<br /><br />Sources said the deal size is estimated to be about USD 73 million (around Rs 350 crore) and the transaction is expected to close by December.<br /><br />A report from Helsinki last week quoted an Elcoteq official as saying that the deal size could be about USD 72.7 million, the same that was being discussed with a Chinese firm before the LoI agreement with Videocon materialised.<br /><br />If the deal goes through, Elcoteq buyout is expected to give a fillip to Videocon's growth plans in the area of contract manufacturing, especially wireless technologies. <br /><br />Elcoteq has presence in 14 countries and it has a plant in Bangalore, with estimated revenues of around Rs 2,000 crore and around 3,000 employees.<br /><br />The company, which has global revenues of around 3.4 billion euros last year, has been hit hard by the global economic meltdown and is reeling under huge debts.<br /><br />As an electronics manufacturing services company, Elcoteq makes mobile phones for the likes of Sony Ericsson. It also makes set-top boxes, flat panel TVs and enterprise network products for companies like Philips and Cisco.<br /><br />The Videocon group has revenues of around Rs 15,000 crore, majority of which come from consumer durables business and the rest from oil and gas.</p>
<p>The Finland-based company makes gadgets like mobile phones and set-top boxes for companies like Sony Ericsson, Philips and Cisco.<br /><br />"Elcoteq has signed a non-binding Letter of Intent with Videocon Industries Ltd, granting the authority to negotiate and finalize a potential Definitive Transaction Agreement," Videocon said in a filling to the Bombay Stock Exchange.<br /><br />It added that the two companies are "aiming at a rapid process to conclude the agreement. The transaction is expected to close by the end of the year."<br /><br />Videocon officials declined to discuss the agreement's details, but industry sources familiar with the company's plans said it is working on taking a controlling stake in Elcoteq.<br /><br />Sources said the deal size is estimated to be about USD 73 million (around Rs 350 crore) and the transaction is expected to close by December.<br /><br />A report from Helsinki last week quoted an Elcoteq official as saying that the deal size could be about USD 72.7 million, the same that was being discussed with a Chinese firm before the LoI agreement with Videocon materialised.<br /><br />If the deal goes through, Elcoteq buyout is expected to give a fillip to Videocon's growth plans in the area of contract manufacturing, especially wireless technologies. <br /><br />Elcoteq has presence in 14 countries and it has a plant in Bangalore, with estimated revenues of around Rs 2,000 crore and around 3,000 employees.<br /><br />The company, which has global revenues of around 3.4 billion euros last year, has been hit hard by the global economic meltdown and is reeling under huge debts.<br /><br />As an electronics manufacturing services company, Elcoteq makes mobile phones for the likes of Sony Ericsson. It also makes set-top boxes, flat panel TVs and enterprise network products for companies like Philips and Cisco.<br /><br />The Videocon group has revenues of around Rs 15,000 crore, majority of which come from consumer durables business and the rest from oil and gas.</p>