The Hindu Business Line : Mahindra buys Italian gear firm

Mumbai, April 2 Mahindra & Mahindra said it has signed a definitive agreement, through a consortium with ICICI Venture Funds, to acquire 100 per cent stake in an Italian gear manufacturer, Metalcastello S.p.A.

The company did not disclose the cost of the acquisition.

“Together with ICICI Venture, we expect Metalcastello S.p.A, will help us replicate in the gear vertical what Mahindra Forging Ltd has achieved in the forgings space. The customer base of both MFL and Metalcastello is complimentary and will enhance the synergies,” Mr Hemant Luthra, President, Mahindra Systech, said, in a filing with the BSE. “Mahindra Forgings (MFL) has already created one of the leading forging companies in the world,” he added

Mahindra Systech is one of the six business units of M&M; a series of acquisitions has been made through this company in the last fiscal.

The Mahindra group holds majority stake in Rajkot-based gear manufacturing company - Mahindra SAR Transmission Pvt Ltd; this new acquisition augments Systech’s ability to serve its customers from multiple locations i.e. Italy, UK, Germany and India for their auto component needs. It also strengthens the Mahindra group’s position as a leading auto components player in the global market, said a statement from the company.

Metalcastello, based near Bologna, has revenues of around $100 million. The company was originally founded in 1952 and is among the top gear manufacturers in Europe. The company’s product portfolio includes complex gears and shafts for use in vehicle transmissions and drivelines.

Currently, financial investors hold 84.7 per cent of which 66.5 per cent is held by private equity fund Development Capital, advised by Italian firm Alto Partners, and the top management holds 15.3 per cent in Metalcastello.

The company will benefit from the continued presence of the erstwhile management of Metalcastello S.p.A in further building the business of Metalcastello, said the M&M statement.

r Gabriele Pierotti, current CEO of Metalcastello, will continue to hold the position.