Motherson Sumi to acquire Bombardier's wiring business in Mexico for $10 million

Auto components manufacturer, Motherson Sumi Systems Ltd (MSSL), on Tuesday said it is acquiring Electrical Wiring Interconnection Systems (EWIS) performed at Bombardier Transportation’s manufacturing site in Huehuetoca, Mexico (BT Ensambles México) for $10 million (around Rs 74 crore).

MSSL,via its Mexican subsidiary, Motherson Rolling Stocks S. de R.L. de C.V. (MRS), has signed an asset sale and purchase agreement to acquire the company, it said in a statement.

In 2019, the company through its subsidiary Motherson Rolling Stock Systems GB Limited, UK (MRSS) acquired Bombardier’s UK rolling stock electrical component and systems business in Derby. Now, with the execution of this definitive agreement between MRS and Bombardier, the relationship will expand to Mexico, it said.

“Our focus is on adding value to our customers' supply chain and catering to their requirements. This is another step forward in that direction. We are further strengthening the relationship with Bombardier under the global partnership agreement and our collective strength will position us as a preferred solutions provider to our customers in the rolling stock business,” Vivek Chaand Sehgal, Chairman, MSSL said.

The transaction includes the transfer of assets, employees and inventories on a debt-free and cash-free basis (subject to customary adjustments). The revenue of the said business was $25 million for calendar year 2019. The transaction is subject to customary closing events and expected to complete in the fourth quarter of the current financial year, MSSL said.

“The global rail market is extremely dynamic and has become increasingly competitive. Bombardier Transportation aims to enhance its adaptability and agility to changing market conditions, in order to continue to increase its competitiveness and improve its global footprint," Jim Vounassis, Chief Operating Officer, Bombardier Transportation, said.

BT Electrical Wiring Interconnection Systems provides world-class harnesses and electrical assembly based on standard solutions. MRS will continue manufacturing the same electrical harness products at the Huehuetoca site in Mexico with enhanced efficiency in time-to-market, on-time delivery and cost structure.

Both companies are now working on the smooth transition of employees and business, to mitigate any potential impacts and expect to close the transaction in the fourth quarter, MSSL added.