Motherson Sumi Systems Ltd, India’s biggest auto component maker, said on Wednesday it has agreed to acquire the automotive business unit of Hungary’s Abraham and Co. Ltd for €10.4 million ($11.7 million, or Rs 77.6 crore)
The transaction is likely to be completed in October, Motherson Sumi said in a stock-exchange filing.
The company will give on lease part of the acquired assets to SMR Hungary, one of its step-down subsidiaries which has also been a customer of the Hungarian firm for many years. The Hungarian firm makes plastic processing and other products for car makers across Europe.
Motherson Sumi said the integration of this business will allow it to generate operational synergy with SMR. The acquisition will increase the in-house capability of SMR Hungary and support its position as technology and market leader for automotive mirrors in Hungary and Europe, the company said.
The auto-parts maker also said that it will expand the acquired unit to achieve group synergies through supplies to SMR and meet rising demand from customers in Europe.
Motherson Sumi is the flagship company of the Samvardhana Motherson Group. Japan’s Sumitomo Wiring Systems holds a minority stake in the company. Sumitomo planned to invest Rs 562.5 crore ($84 million) in Motherson Sumi, the Indian company said last month.
Motherson Sumi’s revenue have grown at a compound annual pace of 40% over the past 10 years. For the year ended 31 March 2016, it had revenue of Rs 38,677 crore ($5.8 billion) and a net profit of Rs 1,273.7 crore.
The company has grown rapidly thanks partly to acquisitions. In 2014, it agreed to acquire US-based Stoneridge Inc’s wiring harness business for $65.7 million. Its other noticeable purchases include the acquisition of the mirror business of Visiocorp in 2009 and Peguform in 2011.
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