M&M did not disclose the exact payout for the acquisition though it claimed it was the largest acquisition in the auto components sector.
The acquistion, to be done through Mahindras Mauritian subsidiary, is the largest acquisition by an Indian company in the auto component manufacturing space, Systems and Technology (Systech) president Hemant Luthra said.
Jeco, which has a capacity of one lakh tonne per annum and a turnover of 180 million euro, supplies major products including gear boxes, engine & axle pans, hubs, gears and piston heads to customers which include the DaimlerChrysler Group, ZE Group, MAN Nutzfahrzeuge, Volvo, Linde, Renault, Agco, Kessler and Kolbenschmidt.
The stake, currently held by Mahindra, would be transferred to the recently relisted Mahindra Automotive and Steels Ltd (MASL), Luthra said. This is the third acquisition by the company within the space of a year. Earlier in January this year, M&M had acquired 98.6% of the shares in UK-based automotive forging company Stokes Group Ltd.
The board of MASL would be reconstituted to accomodate members of Jeco, he said, adding that the debt of Jeco would get frozen as the German auto component manufacturer is not a highly leveraged company.
The acquistion will help M&M service customers from three locationsUK, Germany and India for their auto component needs. With regard to the benefits accruing to the company as a result of the acquistion, Luthra said, This transaction will result in us establishing a significant footprint in continental Europe.