Mahindra CIE Automotive Ltd’s Board of Directors today resolved to acquire the business of Aurangabad Electricals (AEL) through acquisition of 100% of equity shares for an enterprise value of INR 8756 million, which includes a future deferred payment estimated up to INR 622mn.
Aurangabad Electricals, based in Aurangabad, India, is a manufacturer of automotive aluminium die casting products. It produces a variety of body, brake and engine parts through high-pressure die casting as well as gravity die casting processes.
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With five manufacturing facilities in the country across Aurangabad, Pune and Pantnagar, AEL has been promoted by the Bagla Group and has been led by Rishi Bagla.
Ander Arenaza, Chief Executive Officer of MCIE commented: "This acquisition allows MCIE to enter the aluminium die-casting technology. Its complementary product and customer mix leads to further diversification of the business portfolio of MCIE India, strengthening especially our presence in the two-wheeler space. It has very good manufacturing processes and internal controls and is run by a capable team."
Rishi Bagla, Chairman& Managing Director of AEL said: "AEL has built up a formidable reputation as a high-quality supplier of automotive aluminium die-castings in the Indian and international market over the last three decades. We are convinced that the partnership with MCIE and CIE will give the company a great boost and allow AEL to benefit from global best practices in aluminium die casting. We share a wonderful relationship with CIE based on mutual respect and trust and this has given us great confidence to enter into this strategic transaction. With the proceeds of the transaction, the Bagla group will further develop its industrial activities and businesses."
Jesus Maria Herrera, CEO, CIE Automotive said, "We welcome AEL and team to the CIE family. We are very impressed by the business they have built and its sustainable and profitable growth. We believe that their integration in MCIE will provide important opportunities for both MCIE and AEL. This transaction also reinforces CIEJs commitment to the Indian automotive market and is a new opportunity to further extend the CIE model of manufacturing excellence in India."
The acquisition is expected to be completed on or prior to April 10.
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