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Samsung wants to buy out Dhoots' stake, but price is a problem

Reeba Zachariah

Korean chaebol Samsung is in discussions with the Dhoots of the Videocon Group to buy out the latter's 26 per cent stake in Samsung India Electronics, but talks are deadlocked due to disagreements over the price.

While the Korean major holds 74 per cent in the venture, the Dhoots, through Reasonable Computer Solutions, a closely-held investment arm, holds the balance 26 per cent.

When contacted, Venugopal Dhoot, chairman of the Videocon Group, confirming the development, said, "Samsung has approached us for buying our stake in the local arm. But the price offered by them is far lower than what we value it to be."

It is learnt that Samsung has offered the Dhoots around Rs 2 billion for the 26 per cent stake, with the latter saying they want around Rs 5 billion. Dhoot admitted being offered around Rs 2 billion, and added that he was expecting much more.

Samsung India, on the other hand, played down the issue. A spokesperson for the company said: "We have no plans to increase the equity stake and are not carrying out any negotiations with the joint venture partner, Reasonable Computer Solutions."

Dhoot, on the other hand, confirmed that negotiations were still on. "We are still talking to see if we can resolve the pricing issue. Samsung has approached the Foreign Investment Promotion Board to convert the company into a wholly-owned subsidiary," he said.

The Dhoots and Samsung have become major rivals in the CTV segment, with Videocon having a 19 per cent market share and Samsung emerging as the largest MNC brand with a share of 11 per cent.

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