FountainVest calls off EuroGroup Laminations deal after govt approval fails

Chinese private equity firm FountainVest has called off a deal to buy a major stake ​in EuroGroup Laminations (EGLA) from the Italian electric ​motor parts maker's top shareholder EMS after they ‌failed to obtain a regulatory approval in India.

EMS Euro Management Services and FountainVest-owned investment vehicle Ferrum said in a joint statement on Monday that compliance discussions with Indian authorities had been unsuccessful and an alternative solution could not be found, so they had scrapped the deal.

Shares of EGLA failed to start trading at market open, and were indicated to fall around 50 per cent.

EMS ‌last year agreed to sell its 45.7 per cent stake in the electric motor components supplier to FountainVest in a deal that envisaged a buyout offer aimed at delisting the Italian firm. It was contingent on regulatory approvals in all relevant markets, including India.

 

The activities in India relate ​to EGLA's 40 per cent stake in Kumar Precision Stampings, purchased in 2024, analysts from ‌brokerage Equita said in a note.

As part of the compliance talks, FountainVest and EMS had proposed ​carving ‌out EGLA's Indian subsidiary, they said.

Italy's government had already cleared the ‌transaction by imposing unspecified conditions under the so-called "golden power" rules aimed at shielding strategic assets, according to a ‌document ​seen by Reuters ​in January.

EGLA said in a separate press release that the deal termination did not affect its industrial ‌or financial ​outlook.