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Monday, Jan 28, 2002

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French tractor major buys out Thapars in 2 ventures

Ambarish Mukherjee

NEW DELHI, Jan. 27

THE fourth largest tractor manufacturer in the world, SAME Deutz-Fahr Group SpA (SAFGS) of France, is buying out its Indian partners, the Thapars, in its two joint ventures in India for an undisclosed amount.

The French company has two joint ventures in India with the Thapar group's electrical and automotive equipment manufacturing major, Greaves Ltd.

The first joint venture is the Mumbai-based SAME Greaves Ltd, engaged in manufacturing world-class engines complying with Euro-I emission standards for tractors and other applications like generating sets and marine propulsion. The Thapars hold a 49-per cent stake in the company through Greaves Ltd, while the French company holds 51 per cent.

SAFGS would acquire the 69,56,040 equity shares accounting for 49 per cent held by Greaves Ltd on a price mutually agreed upon, following which the French tractor major would go in for further downstream investments in India, sources said.

The other joint venture is the Tamil Nadu-based SAME Greaves Tractors Ltd, with its plant in Ranipet. Both the Indian and the French partners hold a 50-per cent stake each in the company. The acquisition received the go-ahead from the Foreign Investment Promotion Boards (FIPB) earlier this month.

The company has a share capital of Rs 40 crore and is engaged in the manufacture and sale of tractors. The French partner proposes to bring in Rs 20 crore as fresh investments for acquiring the Indian partner's 50-per cent stake in the tractor company.

According to sources familiar with the development, the French company's acquisition is an initial step towards probable forward integration in the future when it is likely to go in for strategic downstream investments and establish its base in the Indian market which offers excellent long-term growth prospects.

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French tractor major buys out Thapars in 2 ventures

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