Koç Holding’s home appliance maker Arçelik has said it has signed an agreement to acquire Pakistani company Dawlance for $258 million, in a written statement late on June 30.
The acquisition will help drive Arçelik’s growth strategy in emerging markets and its goal of establishing a strong presence in the Asia Pacific region, following its recent investment in Thailand, it stated.
The transaction will give Arçelik a significant presence in the world’s sixth most populous country at a time of increased economic growth, it added.
The acquisition is expected to close by the end of 2016, subject to fulfilment of closing conditions including regulatory approvals.
Dawlance was founded in Karachi in 1980 and remains a privately-owned company. It has two manufacturing sites in Karachi and one in Hyderabad, having 16 regional offices and 2,000 sales points across the country, according to the Arçelik statement. It also reported 2015 revenues of $221 million and EBITDA of $45 million.
“Consolidating the vision of our group, Arçelik has made a significant investment in Pakistan in line with its global growth strategy. I believe this investment will further strengthen Turkey-Pakistan economic ties. Through the incorporation of Dawlance into our group, we will gain a strong and strategic foothold in Pakistan, a promising economy. As Koç Holding, we will continue to support Arçelik’s quest to grow globally through other acquisitions,” said Koç Holding CEO Levent Çakıroğlu.
“Pakistan is the sixth most populous country in the world with a population of 200 million people. In particular its young population and increasingly growing economy make it an enticing prospect as a market in the region. With the acquisition of Dawlance in Pakistan, Arçelik will employ a total workforce of 30,000 worldwide and will have a global production base of 18 manufacturing facilities including Turkey, Romania, Russia, China, South Africa and Thailand. Our acquisition is also a powerful example of south-south cooperation, representing a technology and know-how transfer between developing countries,” said Fatih Ebiçlioğlu, the head of the Consumer Durables Group of Koç Holding.
Arçelik CEO Hakan Bulgurlu said economic growth in Pakistan is leading to more disposable income and purchasing power, while technological advances are making white goods more efficient and more affordable.
“Pakistan’s rapid urbanization and social development is seeing the emergence of more single family dwelling, creating more demand for consumer appliances. We will continue to grow in emerging markets in the future,” he added.
Arçelik, led by its global brands Beko and Grundig, has been extending its global footprint over the past years by acquiring strong regional brands in developing markets. Its 10 brands, Arçelik, Beko, Grundig, Blomberg, ElektraBregenz, Arctic, Leisure, Flavel, Defy and Altus, offer consumers energy efficient and innovative home appliances. In South Africa, Defy is the number one brand and in Romania Arctic is the leader brand, said the company.