The Hindu Business Line : Ashok Leyland to buy Czech co AVIA's truck unit

Ashok Leyland has announced that it has signed a "framework agreement" to acquire the truck business unit of Czech company AVIA a.s.. The consideration was not divulged. This would be the company's first overseas acquisition. Following corporate and statutory approvals, the acquisition process is expected to be concluded by August 2006.

Speaking to newspersons here today, Mr R. Seshasayee, Managing Director, Ashok Leyland, said the Prague-headquartered AVIA manufactures the D Line trucks in the 6T-9T GVW range that are marketed in Europe. The acquisition covers the company's manufacturing facility that is located in the heart of the Czech capital.

AVIA's manufacturing facility is equipped to manufacture 20,000 vehicle units annually.

"AVIA is part of our inorganic growth plan and is a significant step in securing a beach-head in the European Union and Eastern European markets. The acquisition will also give us a modern, international vehicle for our light and medium commercial vehicles range of trucks for India and other export markets," Mr Seshasayee said, adding that the strategic location of AVIA would also open up possibilities of using its facilities as an assembly and marketing base for some of Ashok Leyland's future products.

The AVIA acquisition would also enable the company to "enlarge and upgrade" its offerings in export markets in Europe.

According to Mr Seshasayee, although AVIA's present sales volumes were limited, there was immense scope to expand the company's footprint to new markets such as West Asia, South East Asia, Russia and Ukraine and by also consolidating and strengthening existing dealership arrangements in Europe.

The AVIA D Series trucks are presently marketed in the Czech Republic, Hungary, the UK, Ireland, Slovakia and Spain.

More Stories on : Mergers & Acquisitions | HCV/LCV/Tractors

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page