The Hindu : Business : Sona Okegawa to buy German forging co.

Online edition of India's National Newspaper
Tuesday, Jan 22, 2008
ePaper | Mobile/PDA Version

Business

Business

Sona Okegawa to buy German forging co.

Special Correspondent

NEW DELHI: In a major development, Sona Okegawa on Monday announced that it has entered into an agreement to buy precision forging business of Germany’s ThyssenKrupp, which has a turnover of Rs. 1,740 crore. This deal is seen to be one of the biggest acquisitions in the auto component space by an Indian firm.

After the formal acquisition, expected to be completed by the end of this month, the German firm would operate as Sona Okegawa’s wholly-owned subsidiary.

“With this acquisition, Sona Okegawa will now control the biggest precision forging business in the world,” Sona Group Chairman, Surinder Kapur, said after making the announcement at a press conference.

ThyssenKrup has four plants globally — three in Germany and one in the U.S. — and employs over 1,700 people.

Following the deal, Sona Okegawa has shelved its plan to set up a plant in the U.S.. “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,” Mr. Kapur said.

“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.”

Mix of debt and equity

The plan was to fund the deal through a mix of debt and equity, details of which were being worked out, he said.

Printer friendly page
Send this article to Friends by E-Mail

Business