Allison has signed an asset purchase agreement to acquire the transmission portfolio of India-based Avtec’s off-highway business and its Madras Export Processing Zone (MEPZ) off-highway component machining operation.
Headquartered in New Delhi and part of the CK Birla Group, Avtec is one of India’s largest independent manufacturers of powertrain and products for automotive, off-highway, defence, agriculture and railway industry, in areas of both proprietary products and contract manufacturing.
“The acquisition of the transmission portfolio of Avtec’s off-highway business and associated IP will accelerate Allison’s pursuit of additional opportunities in these segments in India and global markets with purpose-built products that deliver performance and productivity to our customers” said Allison Transmission SVP Global Marketing, Sales and Service, John Coll.
With the acquisition, Allison will also integrate Avtec’s off-highway component machining operations into Allison’s Chennai manufacturing plant, to continue producing housings for Allison’s off-highway transmissions.
“This acquisition supports our overarching sourcing and operations strategies” said Allison SVP Operations and Global Purchasing, Mike Dick.
Allison will pay around US$27m in cash for Avtec’s off-highway transmission portfolio and MEPZ off-highway component machining assets.
The supplier does not expect the acquisition to have a material impact on current fiscal year earnings.
The transaction is subject to completion of certain conditions precedent and is anticipated to close by the end of 2021.