Motherson Sumi to acquire Finland's PKC Group for 571 mn euro

New Delhi: In one of the biggest acquisitions in auto component space by an Indian firm, Motherson Sumi Systems Ltd (MSSL) will launch a 571 million euro (over Rs 4,150 crore) open tender offer to fully acquire Finland's PKC Group Plc (PKC), a maker of wiring harness.

At a meeting of its board of directors on January 19, MSSL 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, the company said in a statement.

"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," it added.

The shares of PKC are currently listed on the Nasdaq Helsinki stock exchange.

MSSL and PKC 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 MSSL to be set up for the purpose, is expected to be completed by the end of March 2017.

MSSL 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.