Ashok Leyland completes acquisition of Nissan's stake in three joint-ventures

Ashok Leyland today said it has completed the acquisition of Japan's Nissan Motor Co's stake in the three joint-ventures - Ashok Leyland Nissan-Vehicles Ltd, Nissan-Ashok Leyland Powertrain Ltd and Nissan-Ashok Leyland Technologies Ltd.

In September, Hinduja Group's flagship firm, Ashok Leyland struck a deal to buy Nissan's stake in three of their loss making joint ventures for an undisclosed sum. (See: Ashok Leyland to buy Nissan Motor stakes in their loss making joint ventures)

''With all necessary statutory approvals now in place the acquisition was completed for a consolidated consideration of Rs 3 paid by Ashok Leyland for all the shares of the three JVs.'' Ashok Leyland said in a statement.

Vinod Dasari, CEO and managing director, Ashok Leyland, said, ''We are very positive on the future of the LCV business which is growing. While we have acquired 100 per cent ownership of the JVs, we will continue to be associated with Nissan for the technology of the existing Dost, Partner, and Mitr models.''

''These are very important products for us and hold tremendous potential both within and outside India. Our association with Nissan continues in a new relationship,'' he added.

In 2008, Nissan Motor and Ashok Leyland signed three joint ventures for light commercial vehicles business, power train manufacturing and technology development.

While Ashok Leyland held a 51-per cent stake and Nissan 49 per cent in both vehicle manufacturing and power train companies, they were 50:50 partners in the technology development company.

Both companies had invested about Rs1,000 crore as equity between them.

Ashok Leyland had earlier said it had written off Rs214 crore from the joint venture, which reported a loss of Rs791 crore in the last fiscal.
 
Under the terms of the new arrangement, both companies have agreed for a licensing pact for select vehicles.

Servicing and parts availability for customers will be ensured by a technical support arrangement. In addition, the two companies have agreed to continue a deal to procure made-in-India parts to Nissan.

The parting of ways comes six months after Nissan sent a termination notice to Ashok Leyland over the technology joint venture, after Ashok Leyland moved a district court near Chennai against Renault Nissan Automotive India Pvt Ltd over alleged violations of contract agreement and flouting of Export Promotion Capital Goods (EPCG) scheme regulations. (Nissan sends JV termination notice to Ashok Leyland)