Financial Daily from THE HINDU group of publications
Saturday, Feb 26, 2005
Financial Daily from THE HINDU group of publications Saturday, Feb 26, 2005 |
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Corporate
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Mergers & Acquisitions `Tata Motors should leverage Hispano's design capability' Our Bureau
Mumbai , Feb. 25 THE "heart of the deal'' in Tata Motors' acquisition of a 21 per cent stake in Spanish bus manufacturer, Hispano Carrocera (HC), is the latter's in-house product development facility, Mr Ravi Kant, Executive Director, Tata Motors, said. According to him, the deal's impact would play out in how the Tatas leverage the Spanish company's design and development capability on to the Indian company's superior volumes. This is the first real opportunity for Tata Motors and Tata-Daewoo Commercial Vehicles to access the European market. "This strategic alliance with Hispano Carrocera will give us access to its design and technological capabilities to fully tap the growing potential of this segment in India and other export markets, besides providing us with a foothold in developed European markets,'' he said. HC used to source the chassis for its buses from other manufacturers. Now there is the potential for sourcing that from either Tata Motors or Tata-Daewoo Commercial Vehicles. The call option for acquiring full equity at HC is valid for the next five years. It will be exercised subject to certain performance criteria. The Rs 70-crore indicated for the deal covers the cost of 100 per cent stake, Mr Ravi Kant said.
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