 "Samvardhana Motherson to acquire DICV's frame manufacturing, assembly ops")
Auto components maker Samvardhana Motherson International Ltd on Thursday said it will acquire Daimler India Commercial Vehicles' (DICV) frame manufacturing and assembly operations facilities in Chennai.
The company, formerly known as Motherson Sumi Systems Ltd, has signed a strategic agreement, including a long-term deal with DICV for supply of the complete frame assembly as a part of the transaction, Samvardhana Motherson International Ltd (SAMIL) said in a regulatory filing.
At present, SAMIL, through a wholly-owned arm, runs the manufacturing operations of the frame manufacturing facility of DICV but the frame assembly operations are managed by DICV itself in a separate facility, it added.
"Once the transaction is completed, SAMIL will own the assets, including long-term leasehold rights for land, and will run end-to-end operations for frame manufacturing and assembly and supply to DICV under the long-term supply contract," it added.
SAMIL said the acquisition will be carried out at "book value" without disclosing the exact amount but added based on the volumes produced by DICV in 2021-22 and the terms of the supply agreement, the revenue generated by the assets being bought would have been approximately Rs 300 crore.
"The transaction is expected to close during Q3 fiscal year 2022-23, subject to customary closing conditions and necessary regulatory approvals," it added.
With the purchase of these assets, SAMIL's status will change from contract manufacturer to the principal manufacturer of long members for the frame assembly business. It also opens up Open avenues of similar business model with other OEMs in India, the filing added.