The Board of Directors of Walton Hi-Tech Industries PLC has approved a memorandum of understanding (MOU) for the proposed merger with its sister concern, Walton Digi-Tech Industries Ltd.
According to a regulatory filing following the board meeting on September 3, the merger is subject to approval from the shareholders and creditors of both companies, as well as clearance from the High Court Division of the Supreme Court of Bangladesh.
The necessary agreements will also be executed to ensure a distinct brand identity for both companies.
Walton Digi-Tech Industries, a renowned Bangladeshi IT company with over eight years of consistent operations, is the only recognised full-fledged hi-tech IT product manufacturing company in Bangladesh.
The company offers more than 123 products, including 36 brands, across multiple segments, as per the enlistment by the Bangladesh Investment Development Authority (BIDA).
The merger provides Walton Hi-Tech Industries with a unique opportunity to diversify and strengthen its business portfolio significantly. According to the audited financial statements of Walton Digi-Tech Industries for the fiscal year ending June 30, 2024, the company recorded a paid-up capital of Tk 30 crore, annual revenue of Tk 1,016 crore, and a net profit of Tk 18.14 crore.
Walton Hi-Tech Industries, the largest home appliances manufacturer in the country, went public in 2020. For the fiscal year 2023-24, the company posted an annual revenue of over Tk 7,500 crore and a net profit of Tk 1,356 crore.
The specific terms and conditions of the merger will be finalised in a Definitive Agreement.
The strategic merger is expected to provide Walton Hi-Tech Industries with competitive advantages through vertical integration, expanding its product range to include laptops, desktop PCs, printers, mobiles, printed circuit boards (PCBs), IT accessories, electric bikes, and more.
The rationale behind the merger is driven by key synergies and benefits, including cost and operational efficiencies, technological advancements, market expansion, and a strengthened competitive position in the industry. Details of the merger scheme will be communicated later.
Walton Hi-Tech’s profit drops 23.58%
Walton Hi-Tech Industries, with a market value of over a billion dollars, reported a revenue drop of nearly Tk 430 crore in FY 2024-25 due to subdued consumer demand and political uncertainties, as per its disclosures.
Alongside the decline in sales, higher distribution and finance costs led to a 23.58 percent drop in net profit, which stood at Tk 1,036.62 crore. Earnings per share dropped to Tk 34.22 from Tk 44.78.
Net asset value per share stood at Tk 399.74 at the end of June. Walton shares, with a face value of Tk 10, dropped by 2.41 percent to Tk 481.4 apiece on the Dhaka Stock Exchange on Thursday.