Bharat Forge (500493) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands presence in the commercial vehicle axle segment, enabling entry into new business lines and leveraging core technology for diversification and growth in India.

• The acquired axle business serves commercial vehicles, supporting a shift from components to full product offerings and enhancing the product portfolio and customer base.

• Leverages AAMIMCPL's technical expertise and industry relationships to scale up operations over the medium to long term.

• The business is expected to be EPS and ROC accretive from the first year.

Financial terms and conditions

• Enterprise value of INR 545 crores (Rs. 544.53 crore), subject to closing adjustments.

• Acquisition involves 100% equity shareholding in AAMIMCPL, with cash consideration, on a no-cash, cash-free, debt-free basis.

• The acquired business had a turnover of INR 1,384 crores for FY 2023-24.

Synergies and expected cost savings

• Synergies expected in market reach, technology development, and supply chain integration.

• Immediate potential for forward integration as current supply to the entity is minimal.