Moneycontrol BureauThe Sona Group is looking to end its 32-year long partnership with JTEKT Corporation by selling out its 25 percent stake in flagship company Sona Koyo Steering Systems to the Japanese partner for roughly Rs 575-625 crore, reports the Economic Times today.
The Rs 115-125 per share said to have been offered by the Japanese auto component-maker to the Founder Chairman Surinder Kapur and current Chairman Sunjay Kapur, pegs the value of the joint venture company at Rs 2,300-2,500 crore, around 50 percent higher than current capitalisation. The Indian promoters own 25.28 percent in the JV while JTEKT owns around 20.1 percent. Indian auto major Maruti Suzuki also owns 6.94 percent in the company.
The boom in the Indian auto component market seems to be one of the key reasons for JTEKT to consider buying out Sona Koyo, one of the largest manufacturer of steering systems for passenger cars and utility vehicles in India and key vendors to Maruti Suzuki. The deal was reportedly first pitched in 2015 but got delayed for over a year due to sudden death of Surinder Kapur in July 2015. Discussions resumed in the second half of 2016.
According to the report, JTEKT will make an open offer for an additional 25 percent stake under the takeover code, if the deal goes through.
JTEKT Corporation, the market leader in Japan, will become the world's largest steering systems manufacturer post this merger.
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