M&M to acquire 67.9-per cent stake in German forging company Jeco Holdings

28 September 2006

Mumbai: Mahindra & Mahindra Ltd (M&M) will acquire a 67.9-per cent stake in German forging company Jeco Holding AG. The acquisition, valued at €140 million (over Rs816 crore), will be made through its German subsidiary, the company said in a filing with the BSE.

This will be M&M's largest overseas acquisition in the auto component sector, the company said in the filing. Jeco Holding AG is primarily focused on the truck, bus and trailer market. Its major products include gear boxes, engine and axle pans, hubs, gears and piston heads. The company reported forging production of 100,000 tpa and revenue of €180 million for calendar year 2005.

Jeco's top customers include DaimlerChrysler group, ZE group, MAN Nutzfahrzeuge, Volvo, Linde, Renault, Agco, Kessler and Kolbenschmidt. Scholz AG currently holds 90 per cent in Jeco Holding AG, with the remaining 10 per cent held by the management.

"With this acquisition, the Mahindra group has taken a decisive and important step towards creating a global class and global scale business in auto components. This creates a platform that enables us to pursue our vision of building the auto components business as one of the core businesses of Mahindra group," said Anand Mahindra, MD and vice chairman of the company.

M&M said the company would benefit from the continued presence of the erstwhile shareholders and management of Jeco Holding AG. Thomas Komer will continue to hold the position of chief executive officer, it said.

The transaction, however, is subject to receipt of necessary approvals, M&M added.