Motherson Sumi says Peguform will not affect margins

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Motherson Sumi: Peguform will not affect margins
Vivek Chaand Sehgal, chairman of the Motherson Sumi Group said that company's margins will not be affected on account of Peguform Group acquisitions. He said this on the CNBC TV18. 

The company had announced on Monday, that the total consideration for its acquisition of 80 percent stake in Germany based Peguform Group from Cross Industries AG would be 141.5 million Euros. The Board of Directors of Motherson Sumi had given approval to the deal on July 13, 2011.

Motherson Sumi will acquire the controlling stake in the German firm through its Partnership with Samvardhana Motherson Finance in which Motherson Sumi would have 51 percent stake and 49 percent will be held by Samvardhana Motherson Finance. Out of the total deal value of 141.5 million Euros, the share of Motherson Sumi Systems would be 72.165 million Euros.

Motherson Sumi will finance the acquisition through overseas borrowing of funds. India's largest Private sector bank, ICICI Bank has been mandated as the lead arranger for the management of the transaction. Cross Industries AG will continue to hold 20 percent share in Peguform Group.

Motherson Sumi is an auto part supplier and is present in segments such as wiring harnesses, automotive rearview mirrors, injection molded products and tools, metal and machine components, etc.

Peguform Group is a manufacture of bumper systems and front end models for vehicles, cockpits, components for automobile interiors and exteriors. The company had revenue of 1,355.53 million Euros and a Profit after tax of 66.87 million Euro in 2010.

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