Butterfly will operate as separate entity, says Crompton after shareholders reject merger proposal

Crompton Greaves Consumer Electricals Ltd and Butterfly Gandhimathi Appliances will continue to operate as separate individual listed entities following the rejection of their merger proposal by the latter's public shareholders. Shareholders of Butterfly had in their meeting held on October 28 rejected the scheme of amalgamation with Crompton Greaves Consumer Electricals Ltd (CGCEL).

"While the approval to the scheme from the majority in number representing three-fourths in value of the equity shareholders (including public shareholders) of Butterfly was obtained at the meeting, approval of a majority of the public shareholders of Butterfly was not received in favour of the scheme at the said meeting of the shareholders," Butterfly informed bourses in a late-night regulatory filing on Monday.

Accordingly, the scheme will not be acted upon, due to the non-receipt of the requisite approval from public shareholders of Butterfly.


"...Both the companies will continue to operate as separate entities and work towards fulfilling their mutual strength," Butterfly said.

A meeting of equity shareholders, secured creditors and unsecured creditors of Butterfly was convened on October 28 on the directions of the Chennai Bench of the National Company Law Tribunal.

A day after this development, CGCEL, which had earlier announced the acquisition of a 81 per cent stake in Butterfly for Rs 2,076 crore, said both brands would continue to optimise various revenue and cost synergies by leveraging the distinctive strengths of each company within the kitchen appliances segment.

"While the merger will not proceed, there are currently no plans to re-initiate it and thereby Crompton and Butterfly will continue to operate independently, reinforcing their strong market positions and strategies," CGCEL said.

The strategy in the kitchen appliances segment will encompass both the 'Crompton' and 'Butterfly' brands, with the expectation of delivering significant growth over the next few years.

"This initiative offers shareholders of both companies an opportunity to participate in the long-term growth and value creation," it said.

In February 2022, CGCEL announced the acquisition of an 81 per cent stake in Butterfly for Rs 2,076 crore.

Tamil Nadu-based Butterfly Gandhimathi Appliances operates in the kitchen and small domestic appliances.