Mumbai: The board of Kirloskar Electric Co Ltd has approved the acquisition of nearly 95 per cent stake in German manufacturing company Lloyd Dynamowerke GmbH & Co (LDW) and the entire holding in Lloyd Beteiligungs GmbH, from CMP Fonds 1 GmbH.

The acquisition is expected to cost around 50 million euro ($70 million), the company said in a statement. The exact deal size could vary depending on the debt facility with multiple lenders, it added.

Vijay Kirloskar flagship company Kirloskar Electric has floated a wholly owned subsidiary, called Kirsons BV, in the Netherlands for making the acquisitions

A definitive deal to acquire LDW could be signed as early as Thursday, sources said.

LDW, based in Bremen, Germany, manufactures motors, machines and drive systems for Siemens, Alstom, ThyssenKrupp and Gottwald. The company manufactures electrical rotating machines and drive systems mostly for industrial applications for extraordinary requirements.

LDW, majority owned by CMP Capital, has around 250 employees and is engaged in a variety of business verticals, including, ship building. The company  had reported revenues of 49 million euro (about $80 million) last year.

KEC,  with plants in Bangalore, Mysore, Tumkur and Hubli, manufactures products ranging from A/C motors, generators, DG sets, switchgear equipment, transformers and traction equipment.

The company has been undergoing a restructuring involving an expenditure of around Rs620 crore, backed by a real estate sale, to bring itself back into profit.

In April this year, KEC merged its 76.34 per cent-owned subsidiary, Kaytee Switchgear, with itself.

For the first quarter ended 30 June 2008, KEC reported a total income of Rs196.63 crore and a net profit of Rs5.1 crore. For the whole of 2007-08,  KEC reported total income of Rs733.74 crore and a net profit of Rs23.6 crore.