Sundram Fasteners to buy German firm

INDIA INC's OVERSEAS ACQUISITIONS CONTINUE

Sundram Fasteners on Monday announced that it is to acquire a German auto component company Peiner Umformtechnik for an undisclosed sum primarily to access its European customer base.

Sundram Fasteners' acquisition cost is based on the value of Peiner's assets at the end of December and the acquisition will take effect in January. Sundram Fasteners' Chairman and Managing Director, Suresh Krishna, told a press conference, "It's a good price; we more or less know the consideration." Peiner's a profitable unit, he added.

Peiner is owned by Textron Deutschland, with whom Sundram Fasteners' has entered into an agreement to acquire 100 per cent of Peiner's equity for cash. Krishna said the acquisition would be funded through internal accruals.

Peiner makes standard and special fasteners for the automobile, industrial and construction sectors. Sundram Fasteners' also makes high tensile fasteners for the automotive industry.

Peiner's construction fasteners unit will be an addition to Sundram's product range. Peiner's sales is around Rs 250 crore, while Sundram Fasteners' net sales last fiscal was Rs 930 crore.

Peiner's existing management is to continue. The company will continue to make its current product range.

Every year, Peiner loses competitiveness in some of its products which are then outsourced to other countries by its European customers. Wherever Peiner turned uncompetitive, Sundram Fasteners would transfer manufacturing of the same to India, explained an official.

Peiner is Sundram Fasteners' second European acquisition "� it acquired the UK-based precision forge facility of Dana Spicer two years ago for $ 2.64 million.

In the acquisition, the technology that Sundram Fasteners' could absorb was a key element in the deal. In the Peiner acquisition, the company's customer base, which includes DaimlerChrysler, DAF Trucks and Renault, was an important determinant, said an official.

Krishna explained that customer base was important because European companies preferred to buy from other European vendors. For Sundram Fasteners to take full advantage of the wave of auto component outsourcing, access to customers was important, he added.

With the Peiner acquisition, Sundram Fasteners' manufacturing presence will span UK, Germany, China, Malaysia and India. Global steps

To buy German firm Peiner Umformtechnik for an undisclosed sum, to access European customer base

This is Sundram's second European buy after the UK-based unit of Dana Spicer 2 years ago for $2.64 million