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India’s Crompton Greaves buys Emotron for €58.7m

20 May, 2011

The Indian engineering group Crompton Greaves (CG) is buying the Swedish drives-maker Emotron for €58.7m from Polaris Private Equity. Last year, Emotron achieved revenues worth €37.3m and pre-tax earnings worth €4.4m. It employs 150 people and has development and manufacturing sites in Sweden, the Netherlands and Germany.

The acquisition, which fills the gap in CG’s industrial automation portfolio, will help the Mumbai-based company to boost its global presence in the market for energy-saving systems based on power electronics. It already has operations in Europe and offers industrial motors and generators.

Compton Greaves says that, with its expanded portfolio, it hopes to become “a major force to reckon with” in the global VSD and industrial motors market. The acquisition will also allow it to offer integrated systems in India. The Indian VSD market is estimated to be worth $375m at present and is expected to grow rapidly.

Emotron, formed when three companies merged in 1975, produces AC drives in the range 200W–3MW, 200–690V. It also offers medium-voltage drives, switched reluctance motors, soft-starts, shaft power monitors and rotary heat exchangers. It focuses on three application areas: flow control for pumps, fans, and compressors; materials-handling for cranes, crushers, mills, mixers, saw mills, conveyors; and lift controls. It is particularly strong in the German and Benelux markets.

The deal will strengthen Emotron’s r&d resources and give it access to new markets. “This is good news for Emotron and our customers,” says the company’s CEO and president, Philip Schwarz (shown above, left, with Crompton Greaves CEO, S M Trehan). “This will be a long-term ownership with a strategy to invest in our company and our technology.

“Stronger resources in research and development will increase speed in product development,” he adds. “We will be able to offer optimised drive systems and also expand into new markets such as the high-growth Indian market. Customers will also gain from a wider global presence for service and support.”

Crompton Greaves can trace its history back to 1878 when Colonel REB Crompton founded an electrical business in Essex, UK. Crompton later merged with F&A Parkinson to form Crompton Parkinson which founded an Indian subsidiary in 1937. This later merged with Greaves Cotton to form CG. In the 1960s, Crompton Greaves acquired transformer technology from Westinghouse and in 2005 acquired the Belgian-based Pauwels Group.  

Crompton Greaves is now part of the $4bn Avantha Group, an Indian industrial conglomerate with business interests in areas such as pulp and paper, food processing, chemicals, infrastructure and energy.

CG’s portfolio includes products and services for the generation, transmission, distribution and use of electrical energy in three business areas: power systems (transformers, switchgear and circuit breakers), industrial systems (motors and generators) and consumer products (lighting, ventilation, electrical appliances).

Since 2005, CG has had an ambitious globalisation strategy with the aim of becoming an international player. It employs more than 8,000 people worldwide and has manufacturing bases in Belgium, Canada, Hungary, Indonesia, Ireland, France, the UK and the US, as well as more than 20 manufacturing locations in India.

The Emotron acquisition is expected to close in June 2011, providing that it is approved by the German mergers authority.

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