Mahindra CIE announces acquisition
The board of directors of Mahindra CIE Automotive has approved the acquisition of 100 per cent of the issued and outstanding share capital of Aurangabad Electricals and authorized the signing of a share purchase agreement. The acquired firm’s revenues and PAT for FY18 were Rs. 651 crore and Rs. 34.4 crore, respectively, while its long-term borrowings was at Rs. 88 crore.
Aurangabad Electricals caters to automotive aluminium die-cast components industry and is a crucial supplier to a number of domestic and global two-wheeler and passenger car OEMs and Tier-1 auto component companies.
For this acquisition, the company would pay Rs. 830 crore in cash. The said acquisition is expected to be completed before April 10, 2019. The company’s management believes that this acquisition would lead to the company’s entry into the automotive aluminium die-casting segment and increase strength in the two-wheeler segment.
The stock of Mahindra CIE spiked up after the announcement and touched an intraday high of Rs. 246.80 apiece as against its previous close of Rs. 239.40. Later, the stock cooled down and at 15.23 hours, the stock was trading at Rs. 239.70 per share, up by 0.15 per cent.
Mahindra CIE Automotive is a multi-technology automotive components supplier.