Stock Market

Motherson up 4%, to buy Finland’s truck wire maker for $609 mn

Chillicious Bureau

Motherson Sumi Systems shares gained nearly 4 percent intraday Friday after the board approval for acquisition of Finland based truck wire maker by its subsidiary.

“The board of directors of Motherson Sumi, on January 19, has approved a proposal to launch a voluntary, recommended public tender offer for acquisition of outstanding share capital and voting rights of Finland company PKC Group Plc that currently listed on Nasdaq Helsinki stock exchange,” the auto ancillary and engineering company said in its filing.

Motherson will acquire Finland company through its wholly owned subsidiary that will be set up for this purpose.

“PKC shareholders are being offered a cash consideration of 23.55 euro for each share/options in PKC representing an aggregate equity purchase price of approximately 571 million euro (USD 609 million) in an open tender offer,” the company said.

It feels this combination is expected to be highly value accretive as there is minimal overlap between existing operations in terms of geographical presence and great synergies in product segments which will unlock the true potential of the combined entity.

The acquisition is expected to be completed by end of March 2017.

Helsinki-headquartered PKC is a global tier 1 supplier of wiring harness and associated components to original equipment manufacturers in the heavy & medium duty commercial vehicles and locomotive segments across North America, Europe, Brazil and China.

The PKC Group, which has estimated revenue of approximately 846 million euro for the year 2016, has production facilities in 4 continents with over 22,000 employees.

At 10:38 hours IST, the stock was quoting at Rs 335.45, up Rs 9.95, or 3.06 percent on the BSE.

Posted by Sunil Shankar Matkar