India’s Mahindra Buys German Forger Schoneweiss

Part of global expansion strategy

February 7, 2007 -- Forging has learned that India’s Mahindra & Mahindra Ltd., through its subsidiary Mahindra Forgings Global Ltd, based in Mauritius, has acquired a 90.47% stake in Schoneweiss & Co. GmbH., a German forger. The transaction was consummated on January 1, 2007.

Schoneweiss is a 140-year-old, family-owned German company. It specializes in suspension, power train, and engine parts, and is said to be one of the top five axle beam manufacturers in the world.

The company has forging capacity of 50,000 tpa and turnover of Euro 90 mn (for CY 2005). Its top customers include the DaimlerChrysler Group, MAN, Scania, and Volkswagen. Schoneweiss has three manufacturing plants in Hagen and Gevelsberg, Germany with a total manpower of 550 people.

Previously, Mahindra Forgings acquired Stokes Forgings (UK), and Jeco Holding AG (Germany).

Anand Mahindra, vice chairman and managing director, Mahindra & Mahindra, said, “This acquisition creates for us a strong European base as it is fully harmonious with our existing presence in Germany through Jeco AG. We are now well on the path to capitalize on and consolidate our position towards becoming a globally significant player in the forgings business.

“Also by expanding Mahindra’s ‘Design to Delivery’ bandwidth in the components space,” he continued, “Schoneweiss would be a huge step in the Mahindra’s evolution as the first fully integrated auto component provider from India.”

Hemant Luthra, president, Systems and Technologies Sector (Systech), and a member of the Group Management Board, Mahindra & Mahindra, said, “Schoneweiss is highly regarded for its technical abilities and deep customer relationships with some of the marquee names in Europe. Together with Jeco, it creates a complementary and synergistic business platform. We hope to derive benefits across the various Systech entities from this acquisition. More importantly, we will be able to offer our customers across various geographies a comprehensive suite of products and technical skills.”

He added, “This is furthering our strategic goal of being an auto component player with capability in design & engineering, adding value for our stakeholders.”

Harald Korte and Andreas Voss, members of two of the founding families, will continue as shareholders of Schoneweiss and work with the company

Commenting on the transaction, Harald Korte said, “We expect to derive benefits in both directions by the coming together with Mahindra & Mahindra and are delighted to be a part of this emerging global family”.

Kotak Investment Banking, Mumbai, and M&A International GmbH, Kronberg, Germany, advised Mahindra & Mahindra while InterFinanz, Dusseldorf, acted as consultants for the Schoneweiss Group.

The $3.8 billion Mahindra Group, www.mahindra.com is among the top 10 industrial companies in India. Mahindra & Mahindra is the only Indian company among the top five tractor manufacturers in the world and is the market leader in multi-utility vehicles in India. The Group has a leading presence in key sectors of the Indian economy, including trade and financial services, automotive components, information technology and telecom, and infrastructure development.

The Group employs over 40,000 people and has several state-of-the-art facilities in India and overseas in five continents. Its global subsidiaries include Mahindra Europe Srl, based in Italy; Mahindra USA Inc.; and Mahindra South Africa. M&M has entered into partnerships with international companies like Renault SA, France, and International Truck and Engine Corporation, USA.

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