Automotive components supplier Samvardhana Motherson International Limited (SAMIL) on September 8 announced that it has inked a pact to acquire the frame manufacturing and assembly operation assets of Daimler India Commercial Vehicles, which is a subsidiary of the German Daimler Truck AG.
With the nod from the board of directors, SAMIL said it "has signed a strategic agreement" to acquire the assets of Daimler India operated out of its facilities in Chennai.
The assets are being acquired at "book value", the company informed the stock exchanges.
The acquisition is expected to be completed during the third quarter of fiscal year 2022-23, subject to customary closing conditions and necessary regulatory approvals, SAMIL said.
As a part of the transaction, SAMIL has signed a long-term agreement with Daimler India for "supply of the complete frame assembly", the regulatory filing added.
"Once the transaction is completed, SAMIL will own the assets (including long term leasehold rights for land) and will run end to end operations for frame manufacturing and assembly and supply to DICV under the long-term supply contract," it noted.
According to SAMIL, the purchase of these assets will change its status from contract manufacturer to the principal manufacturer of long members for the frame assembly business.
Based on the volumes produced by Daimler India in fiscal 2021-22 and the terms of the supply agreement, "the revenue generated (by the assets being bought), would have been approximately Rs 3,000 million", the company claimed.
The acquisition will open avenues of similar business model with other original equipment manufacturers (OEMs) in India, it added.
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