If successful, deal could catapult Amtek Auto into one of the world's largets auto parts makers with $2-bn sales and a capacity of 1 mt per year.
NEW DELHI: The $1.3-billion (Rs 7,064 crore) Amtek Auto Group, one of the largest integrated auto component manufacturers in India, is close to acquiring Neumayer Tekfor Group of Germany.
Amtek could pay as much as $500 million (Rs 2,717 crore) to consummate the deal, which would make it one of the world's largest global forging and integrated machining companies with a consolidated capacity of 1 million tonne per year.
Once the transaction is completed, Amtek's turnover will be close to $2 billion (Rs 10,870 crore).
This is the second significant acquisition by an Indian auto component company in the recent past.
Last year, Delhi-based Motherson Sumi Systems Ltd (MSSL) acquired Peguform, a German auto component company with a turnover of $1.37 billion (Rs 7,446 crore).
Amtek Group Chairman Arvind Dham refused to disclose the deal size. "The amount will be disclosed in May," he said. "We are close to the deal and would announce the acquisition of Tekfor in some time," he said.
It's a suitable fit and this new acquisition would complement our manufacturing platforms to make Amtek a global entity in the forging and other allied businesses," Dham added.
A formal announcement to the stock exchanges is likely to be made early this week.
John Flintham, senior MD of Amtek Auto Group, told ET: "Tekfor acquisition will help us in combining our manufacturing platforms with this global company. This would technically enhance our global scale. This transaction has been funded with a structure that will enable the enlarged company to continue to grow. Tekfor's unique business in terms of scale, geographical reach and technology would help Amtek grow as a truly global company."
Tekfor currently operates nine manufacturing facilities across Germany, the US, Brazil, Mexico and Italy with a turnover of around $650 million (Rs 3,532 crore). It is also the market leader in development and production of transmissions, engines, drivelines, special applications and safety fasteners with auto majors such as Volkswagen Group, Fiat, SKF, BMW, Daimler and Ford Motors as its top customers.
The deal will be funded by internal accruals and debt, and will be carried out by a Singapore-based special purpose vehicle created as a fully owned subsidiary of Amtek Auto.
Amtek Auto Group has 43 manufacturing facilities with 39 located in India and four in Europe. The group comprising Amtek Auto, Amtek India and Ahmednagar Forgings is the largest integrated component manufacturer in India.
On Friday, Amtek Auto closed at Rs 70.95 on BSE, up 5.27 per cent. The latest acquisition will allow Amtek Auto to diversify in terms of where its revenues are coming from. According to the company website, India currently accounts for 87 per cent of Amtek Auto's revenues while the remaining comes from overseas markets. Analysts tracking the industry said post-acquisition, the India-overseas ratio might change to 55:45.