Japanese automotive supplier Denso Corporation has announced acquisiton of 51% share in Pricol Components Ltd, a subsidiary of Coimbatore-based automobile components manfuacturer Pricol Ltd, to produce instrument clusters for passenger vehicles in India. Denso, which had its stake in Pricol Ltd, has sold its entire share in the parent company for an aggregate amoung of Rs 6.5 crore.
According to an announcement by Denso Corporation, the company has acquired shares of Pricol Components Ltd, a subsidiary of Pricol Limited, that designs, manufactures, and sells instrument clusters for passenger vehicles. The Japanese firm completed the investment transaction on April 23, 2013 and now holds 51% ownership while Pricol holds the remaining 49%. The size of the deal has not been revealed.
The JV firm would be renamed as Denso Pricol India Limited later this year, it added.
The Joint venture firm which would design, manufacture and sell instrument clusters for passenger vehicles, would have a capital of Rs 10 crore and expects to have a sales of Rs 154 crore (approximately US$28.7 million) planned for fiscal year ending March 31, 2016. It has around 101 employees.
The Competition Commission of India (CCI) has given its nod to Denso's proposal for the JV with Pricol last month, saying that the deal would not have an adverse impact on competition, according to earlier reports. The proposal comprised of Pricol transfering its 'Denso Technology Instrument Cluster Undertaking', connected to the four-wheeler personal passenger vehicles in Coimbatore and Gurgaon to its subsidiary Pricol Components Ltd (PCL).
"Pricol Components began manufacturing instrument clusters for passenger vehicles on April 22, in a section of Pricol’s two plants located in Coimbatore and Manesar, Haryana, India using production equipment obtained from Pricol," said the announcement from Denso Corporation.
Upon investing in Pricol Components, Denso has sold all its shares of Pricol. According to an announcement by Pricol in BSE, the Japanese firm has sold its 4,140,000 shares, which constituted around 4.6% of the total shares in the company through an off market direct sale, for a value of Rs 6.48 crore. According to earlier reports, the company has reduced its stake in Pricol from 12.5% to 4.6%, before this.
Pricol has also recently informed BSE that it has entered into a slum sale agreement with Pricol Components Ltd, which was a wholly owned subsidiary of the company, on April 22, 2013, for transfer on slump sale basis and as a going concern, the Company's Denso Technology Instrument Cluster Undertaking situated at Coimbatore, Tamilnadu and at Manesar, Gurgaon related to the four Wheeler personal passenger vehicles for customers including Maruti Suzuki India Ltd and Toyota Kirloskar Motor Private Limited, together with rights, assets and liabilities primarily used for and attributable to the said undertaking to Pricol Components Ltd.
Denso Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a global automotive supplier of advanced technology, systems and components in the areas of thermal, powertrain control, electronics and information and safety. The company, which claims all the world's major carmakers as its customers, has more than 200 subsidiaries and affiliates in 35 countries and regions including Japan and employs around 120,000 people. The consolidated global sales of Denso Corporation for the fiscal year ending March 31, 2012, was $38.4 billion.
