Optare, with a staff strength of 500, has reported a turnover of $125 million and is listed in the Alternative Investment Market (AIM) and expects to break-even in current year.
Ashok Leyland and Optare will embark upon leveraging the synergies mutually identified. Ashok Leyland will have an access to Optares technology, including a modern range of mid-size and full-size city buses which will appeal to several global markets.
The deal assumes significance at a time when Ashok Leyland is facing stiff competition not only from domestic players but also from global majors. The fast changing public transportation system in cities, stringent carbon emission norms, access to latest technology in design, engines, opportunities to scale up global footprint are some reasons for Ashok Leyland to pick up substantial stake in Optare, said V Sumantran, executive vice-chairman, Hinduja Automotive and member of Ashok Leyland board.
The deal is expected to benefit Ashok Leyland to accelerate technology, new product developments and address new markets, he said. As part of the pact, both the companies will jointly develop new products to be marketed in India & abroad. While Optare will bring technology, design and engine capabilities, Ashok Leyland will use its expertise, manufacturing capabilities and low-cost operational exercises, he added.