Auto component firm Mahindra CIE Automotive Tuesday said its board has approved to buy Aurangabad Electricals Ltd (AEL) for Rs 875.6 crore.
The company's board has resolved to acquire the business of AEL through acquisition of 100 per cent of equity shares for an enterprise value of Rs 875.6 crore, which includes a future deferred payment estimated up to Rs 62.2 crore, Mahindra CIE Automotive (MCIE) said in a regulatory filing.
The acquisition is proposed to be completed on or before April 10, it added.
"This acquisition allows MCIE to enter the aluminum die casting technology," MCIE Chief Executive Officer Ander Arenaza said.
AEL's complementary product and customer mix leads to further diversification of the business portfolio of MCIE India, strengthening especially its presence in the two-wheeler space, he added.
MCIE is part of the Spanish group CIE Automotive. Currently, Mahindra group owns around 11.5 per cent stake in MCIE.
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"We are convinced that the partnership with MCIE and CIE will give the company a great boost and allow AEL to benefit from global best practices in aluminum die casting," AEL Chairman and Managing Director Rishi Bagla said.
With the proceeds of the transaction, the Bagla group will further develop its industrial activities and businesses, he added.
Founded in 1985, AEL is a market-leading aluminum die-casting company based in Aurangabad, with five manufacturing facilities across Aurangabad, Pune and Pantnagar. It manufactures a variety of body, brake and engine parts through high-pressure die-casting as well as gravity die-casting processes.
It also has capabilities for various other processes like machining, heat treatment, powder coating, assembly and leak testing. The company employs over 3,300 employees with sales of around Rs 850 crore.
It is a crucial supplier to a number of domestic and global two-wheeler and passenger car companies.
Mahindra CIE Automotive shares Tuesday rose 0.25 per cent to Rs 240 apiece on the BSE.
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