Varroc inks Euro 600 mn deal with Omnium SE to sell its four-wheeler lighting business
By Team Newsable | First Published Apr 29, 2022, 11:49 AM ISTThis divestment will help the company to align its resources with the high value and high growth primary markets in China, India, and the two-wheeler sector globally.
Aurangabad-based auto component maker Varroc Engineering Limited (VEL) has signed a Securities Purchase Agreement (SPA) with Compagnie Plastic Omnium SE of France for 600 million euros, according to company’s intimation to stock exchanges. The 600-million-euro transaction will see Varroc divesting its lighting System operations in the USA, Brazil, Mexico, Poland, Czech Republic, Germany, Turkey, and Morocco.
The move is part of the larger strategy to transform Varroc into a high-tech company and focus on the existing growth of electronics, connectivity, electric vehicles (EVs) product lines and the two-wheeler segment globally, it said.
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This divestment will help the company to align its resources with the high value and high growth primary markets in China, India, and the two-wheeler sector globally, it added.
Commenting on the development, Tarang Jain, Chairman & Managing Director of Varroc Engineering was quoted by Economic Times saying, “Our immediate goal is to be future-ready with continued profitable growth in emerging sectors like the EV and high technology electronics. The divestment of our passenger car lighting operations in the Americas and Europe will be a win-win deal for Varroc and Plastic Omnium. For us, we unlock great value for all our shareholders, employees, and business partners as we plan for our next level of growth in the fastest-growing economies and auto sectors in the world. We will also continue to invest in our teams and people as we embark on the next phase of our growth.”
It would help the company “unlock great value” for all its shareholders, employees, and business partners as it plans for our next level of growth in the fastest-growing economies and auto sectors in the world, Jain said in the statement.
The sale of VLS will enable the $1.5 billion revenue Indian company to become debt-free and sharpen its focus on the India business.
Varroc will also continue to operate its China JV and other international two-wheeler businesses in countries like Italy and Vietnam and global electronics businesses in Poland and Romania. The company is retaining its four-wheeler lighting operations in Asia.
Rothschild & Co acted as the exclusive financial advisor to VEL on the transaction, financially strong operation, ensuring higher return on investments, the company said.
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