Japan's JTEKT Corporation is acquiring 51.12 per cent stake for around Rs 853 crore in its Indian joint venture, Sona Koyo Steering Systems Ltd (SKSSL).
The Japanese firm will buy out its Indian partner Sona Autocomp Holding Ltd's 25.12 per cent in the JV in an all cash deal and it will be followed by an open offer for another 26 per cent stake.
Under the deal, JTEKT Corporation will pay Rs 84 per share for 49,914,664 shares representing 25.12 per cent stake in SKSSL, aggregating to Rs 419.28 crore.
Besides, JTEKT Corporation has also initiated a public offer to acquire an additional 51,672,877 shares through an open offer, representing an additional 26 per cent of Sona Koyo's existing share capital, at a price of Rs 84 per share aggregating to Rs 434.05 crore.
On completion of the transaction, JTEKT Corporation's stake in SKSSL would increase to 71.22 per cent from the current 20.10 per cent, Sona Autocomp Holding said in a statement.
Commenting on the development, Sona Group CEO Sunjay J Kapur said: "We are delighted to complete a win-win deal for all parties - Sona, JTEKT, our customers and our employees. We are particularly happy that Sona Koyo Steering Systems Limited, set up by our founder, the late Dr Surinder Kapur, will now become a part of the largest steering system company in the world."
The company believes that JTEKT has great plans to integrate its plants and employees into their global network, and bring global scale to the company, he added.
Subject to receipt of approvals and completion of conditions mentioned in the agreement, the transaction is expected to close by the first quarter of the financial year 2017-18.
Kapur and Sona Group nominee directors, Rani Kapur and Kiran Deshmukh, will step down from the Board of SKSSL upon closure of the transaction, the company said.
SKSSL manufactures steering systems for passenger cars and utility vehicles. It supplies steering assemblies to Maruti Suzuki and several global automakers, including Toyota, Tata Motors, Mahindra & Mahindra, Honda, Renault Nissan and Ford.
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