Videocon is deadly serious about Motorola

ALTHOUGH Motorola dismissed an approach to take over its problem-hit handset business as a mere rumour, the Indian conglomerate - Videocon - is deadly serious about it.

Last week, Motorola announced plans to split the company into two independently traded companies – paving the way for a sell-off, of course.

Today [Thursday], it has just announced plans to close its handset manufacturing facility in Singapore as part of a $500 million global cost cutting exercise.

Venugopal Dhoot, chairman of Videocon Industries, has claimed that he is still waiting for a response back from Motorola.
Considering the pressure Motorola is under from activist shareholder, Carl Icahn, it could easily be forced to take the offer more seriously.

In response to suggestions that Videocon couldn't raise the necessary wonga to purchase a company which could be worth around $3.8 billion, Dhoot told Emirates Business magazine, "I think it’s manageable even when the credit markets are low. We are a $400bn group and we have a good market share."

He also claimed that acquiring a handset maker was a natural fit for his business. "We recently received our cellular licences to offer mobile services throughout India," he explained.

"According to our estimates, we can have 25 million subscribers in three years. Moreover, we have 700 retail showrooms selling mobile phones and we plan to increase the number to 2,000."

Although the industry has bad memories of big name takeovers, following the BenQ/Siemens fiasco, observers forget that it is possible to succeed.

China's TCL, for example, reckons it has made a go of its Alcatel handset acquisition. µ