Mahindra CIE to acquire Aurangabad Electricals for ₹875 cr

Our Bureau Mumbai | Updated on March 12, 2019 Published on March 12, 2019

Mahindra CIE Automotive Ltd will acquire the business of Aurangabad Electricals Limited (AEL) for an enterprise value of ₹875 crore in an all-cash deal. This includes a future deferred payment estimated up to ₹62 crore.

MCIE is part of the Spanish group CIE Automotive. Currently, Mahindra group owns around 11.5 per cent stake in MCIE.

MCIE is an automotive components supplier to auto OEMs as well as Tier-1 companies in India, Europe and Mexico. Founded in 1985, AEL is a manufacturer of automotive aluminium die casting products based in Aurangabad.

“This acquisition allows MCIE to enter the aluminium die casting technology. Its complementary product and customer mix leads to further diversification of the business portfolio of MCIE India, strengthening especially our presence in the two wheeler space. It has very good manufacturing processes and internal controls and is run by a capable team,” said Ander Arenaza, Chief Executive Officer, MCIE, in a statement. MCIE will be paying for the acquisition through cash on its balance sheet. Aluminium will play a larger role as electrification of auto industry happens, thus helping MCIE in the future, the company said in a statement to BSE.

It added that this acquisition will also translate to an increase in revenue and profits in India, strengthening of its presence in the two-wheeler segment and diversification of its customer base.

The deal is value-accretive, while also providing synergies with CIE, said MCIE in its statement.

“We are convinced that the partnership with MCIE and CIE will give the company a great boost and allow AEL to benefit from global best practices in aluminium die casting. With the proceeds of the transaction, the Bagla group will further develop its industrial activities and businesses,” said Rishi Bagla, Chairman and Managing Director of AEL.

Published on March 12, 2019
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