Auto parts maker in talks for buys abroad

The Pune-based engineering and automotive component maker RSB is in the final stages of talks with two European component manufacturers for 100 per cent buyout. The group has earmarked ¤19 million (nearly Rs 108 crore) for the acquisition.

With the acquisition, RSB will enter the European markets. RSB plans to fund the buyout through internal accruals and debt in a 60:40 ratio.

This acquisition is in line with the company's strategy to cater to the huge auto components business in the European region which the Indian companies have recently started to explore.

R K Behra, chairman, RSB Group, said, "We are in talks with two local European companies and will be in a position to announce the acquisition formally within six months."

The targeted companies are primarily engaged in supply of construction and earth moving equipment catering to customers such as Caterpillar, Terex and JCV.

After the acquisition, RSB not only plans to cater to the European markets but also aims to export its products such as bucket, boom, arm and shovel which are used in construction and earth moving ventures, to the US and the Canadian markets.

The company bought Michigan-based privately held component manufacturing company of Miller Brothers for $19 million in November last year.

The RSB group is a leading engineering and components manufacturing business house catering to a wide variety of off-highway and heavy automotive segment.

Currently, the company operates through six manufacturing facilities and the construction of two more plants - one each in Chennai and Uttarakhand is due to start soon. The company caters to automotive giants such as Tata Motors, Mahindra and Mahindra, Larsen and Toubro, Caterpillar, Fiat, Piaggio, New Holland and Volvo.