Hyderabad: Attracted by opportunities in Indian telecom and construction markets, US-based Eaton Corp. is eyeing two potential acquisitions in the electrical products sector, a top executive said.
Eaton, a $15.4 billion (Rs74,228 crore) power management company, had in August last year bought the engine valve components division of Kirloskar Oil Engines Ltd with facilities in Ahmednagar and Nashik in Maharashtra for Rs90 crore.
Eaton began India operations in April 1999 by acquiring two facilities manufacturing hydraulic components and systems in Maharashtra — one in Mumbai and the other in Pune — through a global purchase of Aeroquip-Vickers Inc. for $1.7 billion.
Road ahead: Deepak Sharma, Eaton’s general manager for Saarc countries and South-East Asia.
Deepak Sharma, Eaton’s general manager for Saarc (South Asian Association for Regional Cooperation) countries and South-East Asia, said Eaton’s electrical division now plans to introduce its product range in the Indian market not only through acquiring firms but also through greenfield expansion, which involves setting up new units.
“The latest strategy of acquisitions and greenfield expansions is aimed at reaping the benefits from the exploding growth in the Indian telecom sector and on hopes that the real estate and construction sector will bounce back soon from a slowdown,” said Sharma.
Eaton’s electrical division, which contributed more than half of the firm’s worldwide sales in 2008, is a global leader in electrical control, power distribution, uninterruptible power supply (UPS) and industrial automation products and services.
The company has identified some firms making switchgears—electrical equipment widely used in buildings—and UPS products for acquisition, Sharma said. He declined to identify them, citing confidentiality arrangements.
He said these firms had revenues of at least Rs100 crore with established product ranges, strong marketing channels and a large customer base.
“The idea is to acquire these companies and then transfer the technology from global production centres to localize the design and products for the Indian market,” Sharma said. “We expect to conclude the deals in the next three-six months and take another six-nine months for technology transfer and localizing the products.”
The executive said that the size of the Indian power distribution sector that Eaton’s products address is estimated at some $1.5 billion.