INDIA: Parts maker on Europe acquisition trail
Indian auto parts maker Minda Industries hopes to buy a European firm in the quarter to June 2007 and merge unlisted group arms as it looks to gain technology and scale, a top official was reported to have said on Tuesday.
The automotive switch maker plans to buy either a switch maker or alternate fuel conversion kit maker for EUR50-60m euros ($US64.63m) and the target firm could add as much to annual revenue, managing director Nirmal Minda told Reuters.
"We have identified companies and are in advanced stages of negotiaions," he told the news agency. "We need the technology and the market. Acquisition is the best option."
Reuters said Minda Industries has so far expanded capacity for growth and taken the joint venture (JV) route for technology. It has a JV with Italy's FIAMM for automotive horns and batteries. It also made alternate fuel conversion kits with USbased Impco Technologies till the American firm pulled out as part of its global strategy.
In October Minda had agreed with French car parts maker Valeo to form a JV to make lamps and starter motors, Reuters said, adding that the JV was likely to be firmed up by March.
Consulting firm McKinsey & Co. has forecast India's auto parts exports to hit $US20-25bn by 2015 as global auto makers increasingly source components from low-cost centres, Reuters noted.
Minda reportedly said a proposal to merge group firms was likely to be placed before the board in April, as the company looks to accelerate growth and volumes.
"We are looking at firms to be merged with Minda Industries," he told Reuters. "The merger would happen in phases."
The report said the group has seven unlisted firms making horns, lamps, batteries and alternate fuel conversion kits.
Minda Industries, the only listed arm, accounted for more than half the group revenue of INR5.45bn in 2005/06. The company, which reported sales of 2.68bn rupees in 2005/06 was likely to end the year to March 2007 at about 4bn rupees, Minda told Reuters, adding: "A merger could double annual revenue growth to 70%."