News: M&M forges pact with German firm

(TT 29/09/2006) Mumbai - Mahindra & Mahindra today said it would acquire a 67.9 per cent stake in German forging company Jeco Holding at an enterprise value of 140 million euros (over Rs 816 crore).

M&M said it had decided to acquire the stake through its subsidiary and claimed that it was the largest outbound acquisition in the auto component arena.

Jeco Holding primarily focuses on the truck, bus and trailer market. While Scholz AG holds a 90 per cent stake in the company, the remaining 10 per cent is with the management.

Its major products include gear boxes, engine and axle pans, hubs, gears and piston heads and its customers include DaimlerChrysler, ZE Group, MAN Nutzfahrzeuge, Volvo, Linde, Renault, Agco, Kessler and Kolbenschmidt.

“With this acquisition, the Mahindra group has taken a decisive and important step towards creating a global class and global scale business in auto components. This creates a platform that enables us to pursue our vision of building the auto components business as one of the core businesses of the Mahindra group,” managing director and vice-chairman Anand Mahindra said.

According to Hemant Luthra, president, systems and technologies sector, the transaction will result in the group establishing a significant footprint in continental Europe.

“We would also be uniquely positioned to serve our customers from three locations — the UK, Germany and India — for their auto component needs, by driving synergies across the locations.”

“This acquisition is an important component of our strategy of building a global auto component business serving OEMs across geographies,’’ he added.