The Hindu Business Line : Caterpillar eyeing Hindustan Motors’ arm

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Caterpillar eyeing Hindustan Motors’ arm

Global construction and mining equipment major Caterpillar Inc is understood to be in the final stages of striking a deal with CK Birla group to acquire its auto components arm, Avtec Ltd.

Sources from vendors of both the companies confirmed under condition of anonymity that Caterpillar was interested in the deal as it made tremendous sense after it announced its intention to make India as a hub for sourcing 3508 engines and 777 off-the road vehicle.

Only last week Caterpillar announced $200 million investment plan for its Indian operations to increase capacity of its off-road vehicles, engines and also to set up a greenfield facility to make backhoe loaders. Sources further said that in order to gear up 3508 capacity, it is critically important for Caterpillar to have large machining centres, which Avetec has, at its Pitampur facility.

Avtec was floated after Hindustan Motors (HM) spun off two of its production units in Hosur (manufacturing transmissions and related components) and Pitampur (manufacturing power train) near Indore, in June 2005. HM and other CK Birla group companies own 70 per cent in Avtec and the rest is held by the private equity investor, Actis.

T. Murrali