India’s biggest auto components manufacturer Motherson Sumi System Ltd has offered to buy Finnish truck wire harness maker PKC Group for 571 million euros (Rs 4,146 crore) to expand global presence.
Motherson has offered 23.55 euros per PKC share, representing 51 per cent premium to the closing price on Thursday, in a public tender.
The acquisition is expected to be completed by the end of March, Motherson has said in a statement.
PKC in a separate statement said its board is backing the offer. “Combining the companies will create a leading supplier of wiring systems and components for the worldwide transportation industry,” it said.
While Motherson will gain access to PKC’s presence in the US and European commercial vehicle market, the merger will help the Finnish company expand in the Asia Pacific region.
At a meeting of its board of directors on January 19, Motherson has approved a proposal to launch a voluntary, recommended public tender offer for the acquisition of the outstanding share capital and voting rights of PKC Group Plc, Finland.
“PKC shareholders are being offered a cash consideration of euro 23.55 for each share/options in PKC representing an aggregate equity purchase price of approximately euro 571 million in an open tender offer,” the Indian company said in the statement.
The shares of PKC are currently listed on the Nasdaq Helsinki stock exchange.
Motherson and PKC have entered into a combination agreement for the proposed transaction, the statement added.
Motherson Sumi will make a voluntary, recommended public tender offer to acquire all the issued and outstanding shares and option rights in PKC.
The acquisition, which will be made through a 100 per cent subsidiary of Motherson to be set up for the purpose, is expected to be completed by the end of March 2017.
Motherson Chairman Vivek Chaand Sehgal said: “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 service our customers in additional locations in the world.”
He further said: “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.”
Headquartered in Helsinki, Finland, PKC is a global tier 1 supplier of wiring harness and associated components to original equipment manufacturers (OEMs) in the heavy and medium duty commercial vehicles and locomotive segments across North America, Europe, Brazil and China.
The proposed acquisition of PKC supports MSSL in expanding its presence in the niche market of global wiring harness business for commercial vehicles, the statement said.
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, it added.
The transaction is subject to the completion of closing conditions and receipt of necessary regulatory approvals, it said.
