Sona Forged ThyssenKrupp Assets
In what could be one of the biggest acquisitions in the auto component space by an Indian firm, Kapur family-promoted Sona Okegawa today said it will acquire the precision forging business of Germany’s ThyssenKrupp, which has a turnover of Rs 1,740 crore.While the Sona Group company did not disclose the value of transaction, it said the acquisition of ThyssenKrupp Prazisionsschmiede (TPG) would make it the biggest precision forgings maker in the world.“The precision forging business of ThyssenKrupp group has revenues in access of Rs 1,740 crore with 24 per cent market share globally. With this acquisition, Sona Okegawa will now control the biggest precision forging business in the world,” Sona Group Chairman Surinder Kapur told reporters.He said, post the acquisition, which is expected to be completed by end of this month, the German firm would operate as Sona Okegawa’s wholly-owned subsidiary.
The ¤ 291 million precision forging business of ThyssenKrupp is nearly 10 times the size of Sona Okegawa, which has revenues of about Rs 180 crore.It operates out of four plants globally, three in Germany and one in the US, and employs over 1,700 people.Sona Okegawa, which was earlier mulling to set up a plant in the US, has shelved its plans after the takeover deal.“The plans for a greenfield facility in the US have been shelved as we will get access to the market through ThyssenKrupp’s facility there,” Kapur said.
Also, the acquisition would give us direct access to many of the global manufacturers, which are TPG’s clients. Kapur said the company plans to fund the deal through a mix of debt and equity and is presently working out the details for the funding.“The deal is a cash-free and debt transaction. The amount will be raised in the overseas markets and will not have any recourse on Sona Okegawa’s Indian operations,” Kapur said.
Last year, the Sona group had raised the equity capital of Sona Okegawa by infusing Rs 100 crore.Sona Okegawa is a joint venture between India’s Sona Group and Mitshubishi Materials of Japan. Sona Group holds 75 per cent stake in the venture, while the remaining is held by the Japanese partner.
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