Wipro buys 80% stake in Brazilian cylinder maker

Wipro Limited has signed a definite agreement to acquire an 80 per cent stake in Brazilian hydraulic cylinder manufacturer RKM Equipamentos Hidráulicos for an undisclosed amount.

According to the agreement, Wipro will acquire the remaining stake over the next three years. RKM would be a part of Wipro’s infrastructure engineering division.

The Bangalore-headquartered company said the acquisition was expected to be completed during this quarter, subject to customary regulatory approvals.

RKM, one of the top four manufacturers of hydraulic cylinders in Brazil, has one plant near Sao Paulo, the capital of Brazil.

The company, which counts global automobile companies and equipment manufacturers like Volvo, AGCO Corporation and CNH Global among its clients, employs 200 people.

Apart from giving a manufacturing base, the acquisition will also mark the entry of Wipro’s infrastructure engineering division into the Brazilian market.

“Brazil is an extremely attractive market for us which is seeing huge investments in infrastructure space, driven by a high-growth economy. The acquisition will provide us an ideal platform to expand our offerings in the Brazilian market and the rest of the Latin America,” said Pratik Kumar, president, Wipro Infrastructure Engineering.

Wipro Infrastructure Engineering, which accounts for less than four per cent of the company’s overall revenues, has three manufacturing facilities in Europe and four in Sweden. It has three manufacturing plants in India and one each in Finland and China. The China plant is expected to be operational this month.

It is a Tier-1 supplier to global original equipment manufacturers of construction and earth moving machinery, material handling equipment, forestry equipment, heavy and medium commercial vehicles.