Financial Daily from THE HINDU group of publications
Monday, Mar 27, 2006
Financial Daily from THE HINDU group of publications Monday, Mar 27, 2006 |
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Corporate
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Mergers & Acquisitions ITL scouting for cos in eastern Europe, China Neha Kaushik
New Delhi , March 26 Yet another Indian tractor maker is spreading its wings to go global. International Tractors Ltd (ITL), which sells tractors under the Sonalika brand, is scouting for acquisitions in eastern Europe and China. According to Mr L.D. Mittal, Chairman, the company is likely to spend Rs 300-400 crore for the acquisition, the first of which will be in eastern Europe. "We are in talks with a couple of tractor companies, one of which is located in Romania. The acquisition would allow us to build an export base in the region."
Low-cost base
Setting up a manufacturing base in eastern Europe has become advantageous after most countries in the region joined the European Union, as these countries can now be utilised as a low-cost export base for all of Europe. Last year Escorts Ltd bought 100 per stake in its Polish subsidiary, while Mahindra & Mahindra is also keen to acquire a unit in the region. According to Mr Mittal, the acquisition would be finalised in two months. He added that the buyout would also help the company access technology for tractors of higher horsepower. "We may offload more stake in ITL to gain funds for the acquisition. We are in talks to offload further 10 per cent stake in ITL to a private equity firm." Recently, Japanese tractor major Yanmar had bought 12 per cent stake in the company, while Citigroup had picked up 10 per cent for an undisclosed amount.
Plans for China
On ITL's proposed plans for the Chinese market, Mr Mittal said that the company was in talks to pick up stake in a tractor firm run by the local Government. "We are surveying the market and would be keen to export from there. It would allow us to have a complete product portfolio to address the export markets."
Related Stories: More Stories on : Mergers & Acquisitions | HCV/LCV/Tractors
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