Crompton Greaves Consumer Electricals Limited — M&A Activity 2023

Mar 25, 2023

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Crompton Greaves Consumer Electricals Limited Registered & Corporate Office: Tower 3, 1[st] Floor, East Wing, Equinox Business Park, LBS Marg, Kurla (West), Mumbai - 400 070.India T: +91 22 6167 8499 F: +91 22 6167 8383 W: www.crompton.co.in CIN: L31900MH2015PLC262254

Date: March 25, 2023

To, To, BSE Limited (“BSE”) , National Stock Exchange of India Limited Corporate Relationship Department, (“NSE”) , 2[nd] Floor, New Trading Ring, “Exchange Plaza”, 5[th] Floor, P.J. Towers, Dalal Street, Plot No. C/1, G Block, Mumbai – 400 001. Bandra- Kurla Complex Bandra (East), Mumbai – 400 051. BSE Scrip Code: 539876 NSE Symbol: CROMPTON ISIN: INE299U01018 ISIN: INE299U01018 Our Reference: 160/2022-23 Our Reference: 160/2022-23

Dear Sir/Madam,

Sub: Disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

i) Press Release

ii)Investor Presentation

This is in continuation of our earlier letter today dated March 25, 2023, informing approval of the Board in respect of Scheme of amalgamation of the Butterfly Gandhimathi Appliances Limited with Crompton Greaves Consumer Electricals Limited. In this regard, please find attached the following:

i) Press Release ii) Investor presentation

The above information is also being made available on the website of the Company at www.crompton.co.in

Kindly take the above information on record and acknowledge.

Thanking you,

For Crompton Greaves Consumer Electricals Limited

Rashmi Khandelwal

Digitally signed by Rashmi Khandelwal DN: c=IN, o=Personal, title=6571, pseudonym=133092532660904848ndUPGYWFT9oI8 7, 2.5.4.20=5da9433664eafa69d23a314f5c20da45b8c4 392b456b9ff24d4c3b398bc97a9d, postalCode=400079, st=Maharashtra, serialNumber=847b14bda041d6dbff97519363528ffa fbe2af6889746847c8868c38c9be8da4, cn=Rashmi Khandelwal Date: 2023.03.25 18:54:56 +05'30'

Rashmi Khandelwal Company Secretary & Compliance Officer ACS - 28839

Crompton Greaves Consumer Electricals Ltd. (“Crompton”) and Butterfly Gandhimathi Appliances Ltd. (“Butterfly”) announce merger

• Merger is expected to accelerate & smoothen the realization of synergies of the combined business

• Simplification of corporate and governance structure and convergence of public shareholders of Butterfly at parent level

• Alignment of interest for shareholders of both companies with benefits to all stakeholders

March 25, 2023: Crompton and Butterfly, today, announced a proposed scheme of amalgamation of Butterfly with Crompton (“ Merger ”).

Upon Merger, the public shareholders of Butterfly as on the record date will receive 22 equity shares of Crompton for every 5 equity shares held by them in Butterfly, as a consideration for the Merger. Post-Merger, the public shareholders of Butterfly will hold ~3.0% stake in the combined entity.

The scheme is subject to the necessary statutory and regulatory approvals including approval of the stock exchanges, SEBI, the respective shareholders and creditors of each of the companies and NCLT (Mumbai and Chennai benches).

Strategic Rationale for the Merger

The Merger will unlock various revenue and cost synergies, achieve economies of scale by pooling the combined resources and provide an impetus to grow across all parts of India. The combined entity is expected to benefit from pooling of human capital that has diverse skills, talent, and vast experience to compete in an increasingly competitive industry. Additionally, it will enable more efficient allocation of capital and result in simplification of the corporate structure.

Mr. Shantanu Khosla, Managing Director – Crompton said “The merger is an important strategic step in the Company’s journey and will help unlock the full potential of the combined businesses. It will enable a faster execution of our Go-To Market strategy and enable greater focus on product innovation. We are confident that this will create significant value for all of our stakeholders.”

Mr. Rangarajan Sriram, Managing Director – Butterfly said “The proposed merger will enable Butterfly to better leverage the pan-India reach of Crompton, integrate more closely with Crompton’s consumer appliances business and tap cross-selling opportunities. It will also provide greater avenues for growth and development of our people.”

Advisors

Kotak Investment Banking is the financial advisor and also provided fairness opinion to the Board of Directors of Crompton on the share exchange ratio. SBI Capital Markets provided the fairness opinion to Butterfly’s Board for the Merger. Ernst & Young Merchant Banking Services LLP and PwC Business Consulting Services LLP, the independent valuers appointed by Crompton and Butterfly respectively, have recommended a share exchange ratio for the Merger. Khaitan & Co acted as the legal advisor.

About Crompton Greaves Consumer Electricals Limited

With a brand legacy of 80+ years, Crompton is India's market leader in the category of fans and residential pumps. Over the years, the organization has continuously strived to produce a range of innovative products that cater to the modern consumer including superior quality and high-performance water heaters, anti-dust fans, antibacterial LED bulbs and a range of other categories like air coolers, food processors like mixer grinders, electric kettles and garment care like irons. The company has further invested in brand and innovation to not only better understand and meet consumer needs, but to also help drive energy efficiency. The consumer business also has a well-established and organized distribution network driven by a strong dealer base across the country offering a wide service network and robust after sales service to its customers. Connect with us on www.crompton.co.in

About Butterfly Gandhimathi Appliances Limited

Butterfly is a leading manufacturer/marketer of domestic kitchen and domestic electrical appliances under the ‘BUTTERFLY’ brand. Leading products are LPG Stoves, Mixer grinders, Table Top Wet Grinders, Pressure Cookers, Stainless Steel Cookware and Non-Stick Cookware. Connect with us on www.butterflyindia.com

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Presentation
Merger
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March 2023

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Disclaimer

This presentation has been prepared by Crompton Greaves Consumer Electricals Ltd. (“ Crompton ”) and Butterfly Gandhimathi Appliances Ltd. (“ Butterfly ”) for information purposes only in relation to a potential arrangement between Crompton and Butterfly pursuant to the scheme of amalgamation and solely for the use of person to whom it is addressed. By attending the meeting where this presentation is made or by reading the slides of this presentation, you agree to be bound by the following conditions.

This presentation and its contents are confidential and should not be distributed, published or reproduced, in whole or part, or disclosed by recipients directly or indirectly to any other person. This presentation (including any oral briefing and any question-and-answer in connection with it) is not intended to, and does not constitute, represent or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction. No shares are being offered to the public by means of this presentation. The release, presentation, publication or distribution of this presentation in jurisdictions other than India may be restricted by law and, accordingly, recipients of this presentation represent that they are able to receive this presentation without contravention of any unfulfilled registration requirements or other legal restrictions in the jurisdiction in which they reside or conduct business or have received this presentation. Any persons who are subject to the laws of any jurisdiction other than India should inform themselves about and observe any applicable requirements. Any failure to comply with these restrictions may constitute a violation of applicable laws. Accordingly, any persons in possession of this presentation should inform themselves about and observe any such restrictions.

No statement in this presentation (including any statement of estimated synergies) is intended as a profit forecast or estimate for any period and no statement in this presentation should be interpreted to mean that cash flow from operations, free cash flow, earnings, earnings per share basis for any of Crompton or Butterfly, as appropriate, for the current or future financial years would necessarily match or exceed the historical published cash flow from operations, free cash flow, earnings, earnings per share or income on a clean current cost of supplies basis for any of Crompton or Butterfly, as appropriate.

This presentation includes statements that are, or may be deemed to be "forward-looking statements" and other estimates and projections with respect to management’s subjective views of the anticipated future performance, financial condition, results of operations and businesses of Crompton or Butterfly. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. No assurance can be given that the forward-looking statements in this presentation will be realised. Forward-looking statements include, among other things, statements concerning the potential exposure of any of Crompton or Butterfly to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions including as to future potential cost savings, synergies, earnings, cash flow, return on average capital employed, production and prospects.

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1 Company Profile

2 Overview of the Proposed Merger

Index

3 Key Indicative Activities and Timelines

4 Advisors

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1 Company Profile

2 Overview of the Proposed Merger

Index

3 Key Indicative Activities and Timelines

4 Advisors

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Crompton Overview
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Crompton is the #1 electrical consumer durables company with an 80+ year old brand and a pan-India footprint

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Fans Lighting Pumps Appliances
Top 3 in water heater
Leadership #1 in Fans #3 in Lighting #1 in Residential Pumps
Top 4 in Air coolers
12% (Water Heater)
Market Share 27% 8% (LED Lighting) 16%
8% (Air Coolers)
Market leading Highly experienced Strong track record of Industry leading
distribution reach management team product innovation financial metrics
17% PAT CAGR [2]
Channel Partners – 4,000+ Collective experience of 80+ ~51% revenue from new
155% FCF Conversion
Retailers – 1,50,000+ years with Top Management products [1]
57% ROCE [3]
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Source: Market size and market growth estimates based on Market Pulse and Management Estimates Note: (1) SKUs launched in the last 3 years are classified as new products (2) PAT CAGR is calculated based on reported PAT for FY16-22. (3) RoCE is adjusted for Butterfly acquisition.

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Butterfly Overview
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Butterfly is a leading kitchen appliances player with a strong foothold in South India

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Mixer Grinder Gas Stoves Pressure Cooker Others [1]
Market Share ~11% ~8% ~5% ~2%
45+ year old brand Top 3 No 1 500+ | 25,000+ E-Commerce In-house Capability
Well reputed brand with In core categories of In South India for Wet Exclusive Distributors #1 in Flipkart in mixer ~80% of Revenues from
high consumer recall in Mixers, cookers, stoves Grinders and LPG grinders In-house Manufactured
South, known for Total Touchpoints pan-
in South-India Stoves Products
Aesthetics and Product India with deep #1 in Flipkart and
penetration in South Amazon in wet grinders
Quality
India and gas stoves
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1. Others include non-stick cookware, chimneys, hobs, induction stoves, electric kettles, rice cookers, OTG, sandwich makers, water purifiers & coffee makers Source: Nirmal Bang Institutional Equities Research report, management and expert estimates, Butterfly sales data FY22

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1 Company Profile

2 Overview of the Proposed Merger

Index

3 Key Indicative Activities and Timelines

4 Advisors

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Transaction Summary
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Key Events &
Transaction Transaction Key Approvals
Indicative
Overview Rationale Required
Timelines
► Merger of Butterfly into ► Unlocking full potential of ► Stock Exchanges and ► Announcement of
Crompton combined business SEBI Scheme: Q4 FY23
► Stock exchange and SEBI
► Public shareholders of ► Simplification of corporate ► Shareholders’, Creditors,
approval: Q1 FY24
Butterfly to get structure NCD holders approvals
Crompton’s equity shares ► NCLT convened
► Alignment of interest of all ► NCLT (Mumbai and shareholders meeting:
► Transaction will result in a stakeholders Chennai benches) Q2 FY24
single listed entity
► NCLT approval: Q4 FY24
► Other regulatory
approvals, as may be ► Overall indicative timeline
required
for effecting the Scheme:
12 – 14 months
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Transaction Overview
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Proposed Transaction

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Crompton public
shareholders
100.0% Issue of Equity Shares
Butterfly public
Crompton
shareholders
75.0% 25.0%
Merger
Butterfly
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Resultant Structure*

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Crompton public Butterfly public
shareholders shareholders
~97.0% ~3.0%
Crompton
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Transaction Overview

• Merger of Butterfly with Crompton

• As a consideration, the shareholders of Butterfly will be issued 22 equity shares of Crompton for every 5 equity shares held in Butterfly

◼ As part of this scheme, existing shareholding of Crompton in Butterfly will get cancelled

Note: * Based on outstanding shares as of March 23, 2023

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Rationale for the Proposed Merger
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1 2 3
UNLOCKING FULL POTENTIAL OF COMBINED SIMPLIFICATION OF CORPORATE ALIGNMENT OF INTEREST OF ALL
BUSINESS STRUCTURE STAKEHOLDERS
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• Various revenue and cost synergies to be realized over short to medium term

• Faster Go-To-Market strategy for pan-India expansion

• Enabling greater scale for product innovation

• Ability to cross-sell products across channels

• Pooling of human capital with diverse skills

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• Simplification of the corporate and governance structure

• Unified corporate structure providing

• greater operational flexibility

• and more efficient allocation of capital

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• Converge the public shareholding of subsidiary at holding company level

• Participation in a diversified appliance products business with wide geographical presence

• Both the sets of shareholders to benefit from the combined business synergies

• Greater avenues for growth and development of people

Proposed merger expected to be EPS accretive from first year of it being effective

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Unlocking Combined Business Potential
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1 #2 #3 #4
Capabilities in existing Scale in key kitchen Strong distribution and pan- Leveraging manufacturing &
appliance segments segments India presence R&D infrastructure
Fans #1 Mixer #2
Grinders
Pan-India South
Heaters #3 Stoves & #1
Cooktops
Pan-India
South
Tabletop
Coolers #4 Wet #1
Grinders
Pan-India South
#3
Irons Cookers
South
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The proposed merger is a step in the right direction to unlock the potential of the combined business

Sources: Company, Research Reports, Analyst Estimates

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1 Company Profile

2 Overview of the Proposed Merger

Index

3 Key Indicative Activities and Timelines

4 Advisors

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Key indicative activities and timelines
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Mar 2023 Q1FY24 Q2FY24 Q3FY24 Q4FY24
Board Approval
Filing of scheme with Stock Exchanges
Receipt of Stock Exchanges approval and filing with NCLT
Filing with NCLT
Shareholders / creditors meeting
NCLT / other regulatory process
NCLT Approval
Receipt of NCLT order
Process for filing with ROC
Effective date for merger
Process for issuance and Listing of additional shares of Crompton
Listing & Trading of additional shares of Crompton
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Implementation of the scheme is expected to take around ~ 12 - 14 months subject to receipt of the requisite approvals

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1 Company Profile

Index

2 Overview of the Proposed Merger 3 Key Indicative Activities and Timelines

4 Advisors

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Transaction Advisors
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Crompton Financial Advisor & Fairness Opinion Provider

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Butterfly Fairness Opinion Provider

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Legal Advisor

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Valuation Advisors

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Thank You!