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Hitachi Construction Machinery Co has acquired another 20 per cent stake in Telco Construction Equipment Company from its joint venture partner Tata Motors to scale up its holding to 40 per cent.
Post-stake sale, Tata Motors holds 60 per cent in Telcon. Earlier, in 2000, Tata Motors had inducted Hitachi into Telcon by divesting 20 per cent of its shareholding, thereby enabling Telcon to have access to newer technologies and processes.
The new acquisition, which is pegged at $44.25 million (approximately Rs 203.55 crore), puts the valuation of Telcon at Rs 1,018 crore (Rs 10.18 billion).
Telcon posted a net profit of Rs 40 crore (Rs 400 million) over a gross turnover of Rs 926 crore (Rs 9.26 billion) last year.
Tata group chairman Ratan N Tata, HCM president & CEO S Dazaiand and Telcon chairman J K Setna signed the deal.
The agreement signed among the three companies envisages greater cooperation between HCM and Telcon.
It includes sourcing of components and machines from Telcon, introducing new products of construction equipment in India, setting up a product development facility in India and making Telcon a part of HCM's global network, a media statement issued by Tata Motors said.
The new arrangement will help Telcon improve its product offerings to its customers and evolve as a global manufacturing and design hub. HCM is a leading construction equipment manufacturer with a turnover of around $5 billion.
It is a major player in the area of excavator technology and has manufacturing operations in Japan, China, Indonesia, the Netherlands, France and the US.
Telcon was set up in 1999 as a wholly-owned subsidiary of Tata Motors on the spin-off of the construction equipment business division of Tata Motors.
Telcon is into designing, manufacturing, assembling, selling, distributing and dealing in all services related to earth-moving machinery and construction equipment.
The company has manufacturing facilities at Jamshedpur and Dharwad, and its marketing and service network covers 65 towns in the country.
Telcon's product range includes hydraulic excavators, crawler cranes, wheel loaders, backhoe loaders, dumpers and motor graders.
Shifting Gears
