Butterfly is a famous home appliance manufacturer headquartered in Chennai. The company’s market cap is currently around Rs 2,200 crore. Born in a small town in Coimbatore’s industrial belt, Murugesa Chettiar founded Butterfly Gandhimati Appliances. While his family was in the brassware business, he thought differently and came up with a stainless steel tumbler. It stands out in the market. That is what led to the creation of the Butterfly brand.
In the period 1986 – 89, Butterfly launched a series of stainless steel pressure cookers, flasks, LPG, ovens, mixers and grinders. Listed on Mumbai Stock Exchange in 1994. As of December 2022, Crompton owns 83% of Butterfly. 17.22% are common shares. In this case, the announcement about the merger of the two companies has been released.
The merger requires approvals from various bodies like the National Company Law Tribunal, SEBI, lenders and shareholders. Those procedures will take place over the next year.
After that the common shareholders of Butterfly will get 22 shares of Crompton, equivalent to their 5 shares. Thereafter the number of Butterfly common shares in the combined company is 3%. As on March 24, Butterfly was trading at Rs 1266.25 per share. Crompton’s share price is Rs 292.45. The company has a market cap of Rs 18,500 crore.
Commenting on the merger, Crompton’s MD said: The merger is an important step in the company’s journey. The merger will enable the combined industry to reach its full potential. Bringing new products and go-to-market strategy can be implemented faster. We believe this merger will create significant value for all stakeholders. Said thus.