Motherson Sumi to acquire Finnish truckwire maker PKC Group
20 January 2017
New Delhi-based auto component manufacturer Motherson Sumi Systems Ltd (MSSL has signed an agreement to acquire Finnish truck wire maker PKC Group for €571 million (approximately Rs4,000 crore). PKC shareholders are being offered a cash consideration of €23.55 for each share or options in PKC, representing an aggregate equity purchase price of about €571 million in an open tender offer.
MSSL will make a voluntary, recommended public tender offer to acquire all the issued and outstanding shares and option rights in PKC. The shares of PKC are currently listed on the Nasdaq Helsinki stock exchange, MSSL said in a statement.
Headquartered in Helsinki, Finland, PKC is a global Tier-i 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.
''Wiring harnesses are ever more important to the products of our customers and hold a special place within our hearts at MSSL, because it is our company's genesis'', said Vivek Chaand Sehgal, MSSL's Chairman. ''The prospect of two global teams coming together and the synergies that will be brought about, is very exciting to us. It will allow us to create huge value for our customers and to service our customers in additional locations in the world''.
MSSL has appointed Motilal Oswal Investment Advisors and Nordea Corporate & Investment Banking as financial advisers and White & Case as legal adviser for the transaction.
The transaction, which would be conducted through a newly set up wholly-owned subsidiary of MSSL, is expected to be completed by end of March 2017.
The proposed acquisition of PKC supports MSSL in expanding its presence in the niche market of global wiring harness business for commercial vehicles. The combination is expected to be highly-value accretive as there is minimal overlap between their existing operations in terms of geographical presence and great synergies in product segments which will unlock the true potential of the combined entity.
PKC has a strong presence in American and European wiring harness market for commercial vehicle segment which will provide new opportunities for MSSL to grow in these geographies. MSSL also believes it can help PKC in achieving its expansion opportunities given MSSL's strong market position in the Asia Pacific region which is a highly attractive market for almost all leading commercial vehicle manufacturers.