Company News ( 12th Jan 2007)

GE arm buy to give RIL access to Global Auto

Reliance Industries is looking at the possiblity of joining the bidding for General Electric’s plastics business. If the Mukesh Ambani group flagship enters the fray, this could be the biggest M&A transaction an Indian comopany is involved in.

At this year’s AGM, chairman Mukesh Ambani had stressed on inorganic growth as a way to enhance their global competitiveness. Reliance is pursuing the three-pronged strategy of enhancing growth margins through an emphasis on premium grades and new capacity additions and acquisitions and new technology development. Sources say Reliance is said to be exploring a tie-up with Dow Chemicals. The US major has signed an MoU with Reliance to set up a unit in Reliance’s Jamnagar SEZ.

In turn, Dow would offer a substantial stake in its struggling petrochem unit in the US. A formal announcement is expected anytime. Sources say the bid for GE Plastics is contingent on whether Reliance is able to expand its strategic relationship with Dow Chemicals.

Videocon buys 40 LCD patents from IBM

Durable major Videocon Industries has purchased 40 LCD (liquid crystal display) technology patents from chip maker, IBM to design and manufacture high technology LCD panels used in LCD TVs for an undisclosed amount.

While this moves Videocon into the highly-valued but small league of global LCD panel makers, it also ensures IBM an equally strong partnership with Videocon in the area of semiconductors, hardware and technology, research and development. Videocon currently has a patent for plasma panel technology which it developed at its lab in Japan and Italy with professor Aamno who earlier was in Sony and invented the worlds first monochrome plasma. This technology which commercialises in year 2008 will cut the capital costs of plasma panel by more than 50%.

In the proposed policy the government is planning to provide a 20-25% incentive on the capital expenditure incurred during the first 10 years of operation.