Turkish company Arcelik has announced today, that it is going to acquire Dawlance for a sum of $258 million. The take-over will also be accompanied by the purchase of minority stakes and transferring of land and buildings to the ownership of the Turkish company and is expected to be completed by the end of current calendar year.
The CEO of Koc, while announcing this, said, “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.”
The reasons for acquisition still remain untold but it has been reported that the owner of Dawlance wanted to permanently move abroad and that the company was up for auction since last 5 years.
Major shares of Dawlance are owned by Bashir Dawood who is the brother-in-law of Hussain Dawood, the owner of Dawood Group. Dawood Group has major share presence in HUBCO, Engro and Dawood Hercules groups.
Arcelik is a global player in the home appliances industry with presence in 133 countries. It is the market leader in white goods in Turkey, consumer electronics and air-conditioning and the third largest player in its industry across Europe. Arcelik is owned by Koc Holding which is a Fortune 500 company and Turkey’s largest industrial tycoon. The CEO of Koc, on the occasion of this announcement, termed this investment to be a significant factor in strengthening Turkey-Pakistan economic ties.
Dawlance is a privately-owned company of white goods in Pakistan which was founded in Karachi in 1980. It has two manufacturing sites in Karachi and one in Hyderabad and boasts about 3,000 staff members. The company has a significant foothold in white goods manufacturing domains and even exports some of its goods abroad. As per the available data, Dawlance Group had revenues of $220.6 million in 2015.
The acquisition of Dawlance is surely going to give Arcelik’s presence in Pakistan a major boost as with 37 branches 750+ franchises, Dawlance has a widespread outreach across the country. Dawlance is the largest microwaves and refrigerator market shareholder with 70% and 45% market share respectively.
With the reclassification of Pakistan’s market as an emerging market, such foreign investments were highly anticipated. The Pakistan’s economy is said to grow around 5% annually for the next three years. It has increasingly prosperous working class, with majority aged between 20-40, and is rapidly urbanizing, all of which is very favorable for Arcelik.