M&M buys UK-based Stokes
India?s top tractor and utility vehicle maker, Mahindra & Mahindra Ltd., made another important acquisition to bolster its auto components strategy.india Updated: Jan 05, 2006 01:16 IST
India’s top tractor and utility vehicle maker, Mahindra & Mahindra Ltd., made another important acquisition to bolster its auto components strategy. On Wednesday, it announced that it acquired UK-based automotive forging group Stokes.
This is the fifth acquisition for its auto components play and the first abroad. Hemant Luthra, President MSAT (Mahindra Systems and Automotive Technologies), told Hindustan Times, “We ae focused on three or four major things — gears, engineering services, forging and machining, stampings and composites. Our business is going to build around this. With this acquisition, MSAT’s turnover will be in the vicinity of Rs 1200-1300 crore.”
While Luthra was not forthcoming about the price forked out by M & M, it is believed that they have paid approximately Rs 60 crore for a company which has annual sales of about Rs 200 crore. It has acquired 98.6 per cent stake in the British group.
The acquisition includes taking over all three companies in the group, and will give Mahindra’s Indian customers access to superior technology as well. Stokes group’s customers included original equipment manufacturers and suppliers such as Ford Motor Co., Koyo Bearings, GWK Group, Bosch Corp., Benteler AG and Visteon Corp., Mahindra said in a statement.
The UK group will become part of Mahindra's engineering and auto components division. In the recent past, MSAT has made a slew of acquisitions — SAR Auto in Rajkot for Rs 50 crore, 51 per cent in Amforge in Pune for Rs 135 crore and 88 per cent of Plexion Technologies in Bangalore. Luthra said that there could be many more acquisitions in the future as the company continued to acquire mass. He said, “We are looking at customer base, high quality management, technology and an export base in these companies. Conversely, we will give them the low-cost manufacturing edge based in India. As such, we will be scouting the world for companies with complementary skill sets.”
Luthra said that MSAT has given a commitment to the M&M board that “by the year 2010, we will have a $1 billion of sales in MSAT up from a projected $250 million for the year ending in March 2006. Moreover, we have promised an incremental market cap of a billion dollars around the same time.”