Mahindra Systech to merge with CIE to create Mahindra CIE Automotive
Spanish auto component manufacturer CIE Automotive has signed an agreement to acquire stake in Mahindra Systech - Mumbai-based Mahindra & Mahindra’s (M&M’s) automotive component businesses.
CIE Automotive will acquire 46-52 per cent stakes in Systech through its Brazilian subsidiary Autometal for a sum of around 100 million Euros (Rs 766 crore).
In turn, Mahindra will acquire 13.5 per cent stakes in CIE Automotive. The acquisition will make the Indian auto giant the second-largest stakeholder in the Spanish firm.
Under the terms of the agreement, M&M will merge all of its auto components businesses into its unit Mahindra Forgings. Mahindra Systech is a group of nearly 8-10 component divisions.
Following Mahindra Systech Companies’ merger with CIE the joint entity will be called Mahindra CIE Automotive. While the Spanish firm will own nearly 51 per cent stake in the joint entity, Mahindra will hold 20 per cent and the remaining will be held by private investors.
The entire transaction process will require nearly 12-14 months to be completed.
Mahindra CIE will keep on listing on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
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