Tata Motors to buy 21% in Spanish firm

Mumbai, Feb 25 | Updated: Feb 26 2005, 06:28am hrs
India's largest automobile manufacturing company, Tata Motors Ltd (TML) on Friday said that the company board has approved a proposal to acquire a 21% stake in Spanish bus manufacturing company Hispano Carrocera S.A (HC) for Rs 70 crore with an option to buy over the company completely in the future. The total deal consists of equity, debt and technology licensing Hispano Carrocera had revenues of around 31 million Euros last year and is believed to be passing through troubled times.

TML executive director, (commercial vehicle business unit) Ravi Kant said, "This strategic alliance with Hispano Carrocera will give us access to its design and technological capabilities to fully tap the growing potential of this segment in India and other export markets. Besides, it provides us with a foothold in developed European markets". He added that Tata Motors could leverage the technology available with the Spanish firm in the bus segment in India as well as abroad.

A company statement issued here said that Tata Motors will have the license for technology and brand rights from Hispano Carrocera. The Spanish company has a market share of 25% in the bus market in Spain. It sells its buses in Europe and several other countries outside Europe. It has its own in-house product development facility for buses and coaches. The acquisition plans for the Spanish company is yet another sign of the company's overseas push. Last year, it acquired the commercial vehicle business of Daewoo Motors in Korea. Tata Motors also subsequently listed in the NYSE.

The Tata Motors stock opened at Rs 471 on the Stock Exchange, Mumbai (BSE) on Friday, touched an intra day high of Rs 475.90 and closed at Rs 470 down 0.35% over the previous day's close of Rs 471.75.