The Indian car component manufacturer Motherson Sumi Systems Group has offered to the Finish company PKC Group, one of whose facilities operates in Smederevo, to buy out its managing rights for USD 609 million, Beta reports.
The PKC Group Board of Directors unanimously decided to suggest to the shareholders to accept the offer, which was assessed as very favorable, Beta reported, citing the Finnish company's site.
It was estimated that the transaction would double Motherson Sumi Systems' revenues. The Indian company believes that, by taking over PKC Group, which produces cables for trucks and buses, it will complement its range of products, which is based on passenger car parts.
As both companies reported, this would also unify the market, as PKC Group has a developed network in Europe and North America, whereas its presence in China and Brazil is also considerable.
The document, which was adopted on January 19, 2017, says that Motherson Sumi Systems plans to reach annual sales of USD 18 million and increase total revenues by 2020. It's revenues in the last financial year amounted to USD 5.7 million.
The shares of the Indian giant, which also produces rear view mirrors, bumpers and dashboards, have been estimated at USD 6.7 million, and their value rose by 4% following the announcement of the takeover of PKC.
The managements of the two companies held a meeting in Helsinki, and representatives of Motherson Sumi Systems pointed out that the plan of financing PKC Group would be completed following the approval of the proposed takeover. It is expected that the takeover would be realized in late March 2017.
PKC Group has 22,000 employees, and, in 2016, its turnover amounted to EUR 846 million and its profit was EUR 64 million, Beta reports.
Motherson Suni Systems is one of the fastest developing companies in the world and is 31st on the list of automotive industry suppliers. It was founded in 1986 and is a joint venture of India's Samvardhana Motherson Group and Japan's Sumitomo Wiring Systems. Nearly all the leading car manufacturers in the world are the company's clients.
The company has factories in 26 countries in six continents. According to Forbes, it is one of the 50 biggest companies in India. In November 2013, the facility in Smederevo, which operates in the Free Zone, in the hall raised by the local self-government, joined the company PKC Wiring Systems.