The Hindu Business Line : Siemens VDO mulls merger with parent co

SIEMENS VDO Automotive Ltd is mulling a merger with German engineering giant Siemens, which holds over 86 per cent stake in the auto component company.

A Siemens VDO Automotive official told Business Line that the company's board, at a meeting on Friday, had authorised the management to examine a proposal for a merger with Siemens. The management has also been asked to report to the board about the implications and viability of the proposal and, if necessary, appoint valuers for this purpose. The decision has been conveyed to the Bombay Stock Exchange.

The proposed merger, if approved by the board, will be subject to all the necessary statutory approvals, including approvals of the shareholders of the respective companies and the relevant High Courts.

Siemens holds 86.74 per cent in Siemens VDO and the public holds 12.82 per cent. During its third quarter ended June 2004, Siemens VDO posted net sales of Rs 26.30 crore while net profit was Rs 1.16 crore.

Siemens VDO Automotive is one of the leading automotive suppliers of electronics, electrical systems and mechatronics. The company manufactures drive train, engine management electronics and fuel injection that simultaneously improve engine performance and reduce emissions.

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