Ganguly: Looking beyond

Calcutta, June 28: Rajan Raheja-controlled Exide Industries has evinced interest in taking over the Indian operations of Exide Technologies, the $2.5-billion lead-acid storage battery major.

The foreign company operates here through its subsidiary, Tudor India Ltd, which owns the Prestolite brand.

Tudor is a small player compared with Exide Industries, which virtually rules the branded lead-acid storage battery market in the country.

S. B. Ganguly, chairman of Exide Industries, said it is open to acquiring few assets of the financially beleaguered US company, including its business in India. “We are not interested in the entire company, which has operations in 89 countries. We can look at its operations in India or Dubai, among others.”

He, however, said nothing concrete was on offer as on date and the transaction could take place only if the US company agrees to sell its operations in parts and not as a whole.

It is interesting to note that the US company and its Indian rival were locked in a legal battle over rights to the Exide brand in the late nineties.

After failing to obtain the right, the US company entered India through Tudor with the Prestolite brand.

Exide Industries was formerly part of the UK-based Chloride group. When the Chloride group was split, the Indian operations was bought over by the Birlas, which was subsequently acquired by Raheja in the early nineties.

Exide Technologies, which bought the US operations of Chloride, owns the Exide brand in the US.

Exide Technologies, which came out of bankruptcy last year, is in trouble again, mainly due to steep lead prices, the principal raw material for such batteries.

Average lead prices have gone up by 70 per cent in 2005 but the company has only moderately passed on the increased raw-material cost to consumers.

George Soros, a significant investor in Exide Technologies, has cut his stake in the company, while rating agency Standard & Poor’s has downgraded its corporate credit.

In contrast, Exide India has waded through difficult market conditions to report 23 rise in sales and 6 per cent growth in net profit in 2004-05.