Royal Philips Electronics today said it has agreed to acquire the assets of Chennai-based Preethi, a leading Indian kitchen appliances company for an undisclosed sum.

This will make Philips the clear leader in this specific fast-growing segment within the Indian Domestic Appliances market, Royal Philips Electronics said in a statement posted on its website.

"To capture growth in kitchen appliances, we need to intimately understand local consumer needs and deliver the right solutions," Philips Consumer Lifestyle CEO Pieter Nota said, without divulging financial details of the deal.

He further added: "By building on Preethi's unique local knowledge, heritage of quality and substantial distributor and dealer network, we are well positioned to drive growth in one of the world's most dynamic kitchen appliance markets."

Preethi, founded in 1978, employs approximately 850 people. The company manufactures and sells a wide range of kitchen appliances under the 'Preethi' brand.

"Since launching our first products over 30 years ago, Preethi has grown into one of the most successful and trusted kitchen appliance brands in India," said Preethi CMD TT Varadarajan.

"Now we have an even brighter future with Philips. The combined strength of our two organisations will benefit both our customers and employees," he added.

Varadarajan will continue to spearhead the Preethi business within Philips, the statement said.

As per its website, Preethi has more than 7,000 dealers with 400 authorised service centres and is particularly strong in South India.

Besides, it also exports to the US, Canada, Middle East, Sri Lanka and Indonesia. For several years the company has seen double digit revenue growth in its business.

Philips said upon closing of this transaction in the second quarter of 2011, which is subject to certain contractual and other conditions such as regulatory approval, Preethi will become part of the domestic appliances business group within Philips' consumer lifestyle sector.

It will be led out of the business group's newly established global headquarters in Shanghai, headed by Murali Sivaraman, former CEO of Philips India.

Bullish on the deal, Philips said demand for Preethi's products is expected to continue to rise due to the rapidly expanding Indian middle class, which is projected to grow more than tenfold to over 580 million people from 2007 to 2025