Rayovac Corp. (Madison, WI) announced that it would buy a majority stake in Ningbo Baowang Battery Co. (China), a manufacturer of alkaline batteries, for $24 million to boost its position in the low-cost manufacturing nation. The deal, by which Rayovac will take an 85-percent stake in the company, is subject to approval by the Rayovac board and the Chinese government. A Ningbo investment company and its founder will keep the remaining 15-percent stake.
Rayovac said it expects the deal to add to its earnings in the first year. Ningbo Baowang, founded in 1995, exports sales of $35 million in 2004, with capacity reaching one billion batteries. It is controlled by Chinese conglomerate Ningbo Veken Group Co. Ltd.
"With the alkaline battery market in China experiencing rapid growth and our global customers expanding throughout Asia, it is imperative that we increase our manufacturing capacity in that part of the world," stated Rayovac Chairman and Chief Executive Dave Jones.
