The Hinduja Group, promoters of India’s second-largest truck-maker Ashok Leyland, is in talks with Europe’s third-largest auto component manufacturer Valeo SA to buy a controlling stake in the company in a deal that is expected to be around $1.5 billion (Rs 6,000 crore).
Valeo has a market capitalisation of $3.03 billion according to the company’s last trading day data. At current valuation a controlling stake of 51 per cent would be over $1.5 billion.
The Hinduja Group has projected an investment of $50 billion (Rs 2 lakh crore) over the next 5 to 7 years in diversified growth opportunities. Ashok Leyland had also talked about entering the auto component business at a recent analyst meet.
Valeo reported operating revenues of $15.32 billion in 2007, a1.5 per cent growth over the previous year. The company’s net income for the year was a mere $127.9 million, a 1.7 per cent drop from the previous year.
Hedge fund Paradus European Special Opportunities Master Fund LP is Valeo’s largest shareholder with 18.54 per cent, according to data up to December 31, 2007, available on the company’s website. Morgan Stanley & Co International holds 11.11 per cent as the second-largest shareholder
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