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Auto component major Motherson Sumi Systems Ltd (MSSL) on Tuesday said it has inked a pact to acquire Bombardier's Mexico-based electrical wiring interconnection systems (EWIS) business for around USD 10 million (around Rs 73.5 crore).
The company through its Mexican subsidiary, Motherson Rolling Stocks (MRS), has signed an asset sale and purchase agreement to acquire the activities of EWIS at Bombardier Transportation's manufacturing site in Huehuetoca, Mexico, MSSL said in a statement.
In 2019, the company through a subsidiary had acquired Bombardier's UK rolling stock electrical component and systems business in Derby.
Now, with the execution of this definitive agreement betweenS and Bombardier, the relationship will expand to Mexico, the company said.
The transaction includes the transfer of assets, employees and inventories, on a debt-free and cash-free basis and is valued at around USD 10 million, it added.
The revenue of the said business was USD 25 million for calendar year 2019, MSSL said.
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The transaction is subject to customary closing events and expected to complete in the fourth quarter of the current fiscal, it added.
"Our focus is always on adding value to our customers' supply chain and catering to their requirements. This is another step forward in that direction," MSSL Chairman Vivek Chaand Sehgal said.
The company is further strengthening the relationship with Bombardier under the global partnership agreement, he added.
"Our collective strength will position us as a preferred solutions provider to our customers in the rolling stock business," Sehgal said.
S is part of the Motherson Rolling Stock Division which designs and manufactures electrical cabinets, power packs and electrical distribution systems for leading rolling stock manufacturers.
MSSL, through PKC Group which it acquired in March 2017, is engaged in the manufacturing of wiring harnesses for rolling stock, mainly in Europe and the Americas region.
The global rail market is extremely dynamic and has become increasingly competitive. Bombardier Transportation aims to enhance its adaptability and agility to changing market conditions, in order to continue to increase its competitiveness and improve its global footprint," Bombardier Transportation Chief Operating Officer Jim Vounassis said.
This divestiture is in alignment with the company's global transformation strategy of reducing the activities to its core- and integrating competencies," he added.
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