M&M buys Stokes of UK

Tractor major acquires 98.6% stake in UK firm.

Mahindra & Mahindra (M&M) today announced that it had acquired a 98.6 per cent stake in the UK-based automotive forging maker Stokes Group for an undisclosed amount.

The announcement sent the M&M stock to an all-time high of Rs 527 on a firm Bombay Stock Exchange today. The stock closed at Rs 523.95""1.13 per cent higher than the previous closing.

The Stokes Group is the largest automotive forging company in the UK with a turnover of £25 million (approximately Rs 194 crore). It has two manufacturing facilities at Walsall and Dudley, near Birmingham. Its clientele includes Koyo Bearings, GWK Group, Land Rover, ZF, Bosch, Benteler, Visteon, Ford and Jaguar.

"We believe the acquisition demonstrates our commitment to build a world class business that serves its global customers and enhances value for M&M's stakeholders," said Anand Mahindra, vice-chairman & managing director, M&M.

Khaitan & Co and Sherrards Solicitors, UK, were M&M's legal advisors for the deal.

This is the second acquisition for M&M in a month. M&M had acquired 88.41 per cent in Plexion Technologies (India), an engineering services company of the JP Morgan group, last month.

The UK group will become part of Mahindra's engineering and auto components division, Mahindra Systems and Automotive Technologies (MSAT).

MSAT's business model aims at offering a full range of services from design to delivery "" covering engineering services, strategic sourcing of components and supplying of auto component.

"The acquisition offers multiple benefits to stakeholders of both MSAT and Stokes. Customers in Europe can continue to get high quality product from a better capitalised supplier at economic pricing. Customers here would get access to world class technology and the rich legacy of experience that the Stokes' management team brings to the table," said Hemant Luthra, president, MSAT.

MSAT has set a sales target of $250 million (approximately Rs 1,100 crore) for the year ending March 2006. Luthra said the company plans to achieve a turnover of $1 billion by 2010.