M&M in talks to buy Italian gearbox maker for Rs 400 cr

Jun 08, 2007
Ashish Rukhaiyar
MUMBAI

MAHINDRA & Mahindra (M&M), India’s largest tractor and utility vehicle maker, is believed to be looking at acquiring a gearbox company in Italy in a deal valued between Rs 350-400 crore, people familiar with the situation said. Talks with an investor in the Italian company who wants to exit are in an advanced stage, they added.

The company that is being planned for acquisition is said to be more than 50 years old. It manufactures products such as fully assembled transmission shift rails. It also has a plant in Milan. M&M will acquire it in a phased manner and then turn it around.

“While it is not possible for me to discuss specific deals with you, it is true we keep looking at good companies for acquisition,” said Hemant Luthra, president of Mahindra Systems & Automotive Technologies. “We are looked upon as a credible acquirer and a creator of value, and companies do approach us from time to time,” Mr Luthra added. He declined to give details.

Responding to an e-mail questionnaire, a company spokesperson said she has nothing more to add beyond Mr Luthra’s comments.

People familiar with the deal said M&M wants to fully acquire the company and then merge it with Sar Auto, an M&M group company, and then list it on the domestic bourses. “The acquisition will be done through M&M,” the sources said.

M&M is on a consolidation drive. The board of Mahindra Forgings had recently approved the merger of Mahindra Stokes Holding Company, Mahindra Forgings Overseas and Mahindra Forgings Mauritius with the company as part of the plan.