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Sona BLW acquires Escorts Kubota's Railway Equipment Division for ₹1,600 crore. The division reported ₹950 crore in revenue in FY24, contributing 11% to Escorts Kubota's topline. The Sona BLW share price saw a slight dip after the announcement.
Sona BLW Precision Forgings Ltd. (Sona Comstar) has confirmed the acquisition of the Railway Equipment Division business of Escorts Kubota. The board of Sona BLW approved the acquisition for a total value of ₹1,600 crore, marking a significant expansion in the company’s transportation portfolio.
The acquisition will take place on a slump sale basis, which means Sona BLW will not acquire any shareholding or control in Escorts Kubota itself. Instead, the deal involves only the transfer of the Railway Equipment Division’s assets and operations.
In the financial year 2024, Escorts Kubota’s Railway Equipment Division generated revenue of ₹950 crore, contributing approximately 11% to the company’s overall revenue. This acquisition presents a strategic move for Sona BLW to diversify its offerings and enter the railway equipment sector, a high-growth area of the transportation industry.
Sona BLW, primarily known for its precision forging in the automotive sector, aims to leverage this acquisition to expand into new markets. The Railway Equipment Division’s solid financial performance and growth potential align with Sona BLW's long-term objectives.
Following the announcement of the acquisition, Sona BLW’s share price saw a slight dip, closing 0.055% lower at ₹635. Meanwhile, shares of Escorts Kubota rose 0.77%, closing at ₹3,700, reflecting the market’s positive reception of the sale.
The acquisition positions Sona BLW to strengthen its presence in the railway industry, potentially capturing a larger share of the growing transportation equipment market. The deal is expected to be completed in the coming months, with further details on integration and operational plans likely to be shared by the company.
Sona BLW’s acquisition of Escorts Kubota’s Railway Equipment Division marks a strategic shift for the company as it seeks to expand beyond its core automotive market. The ₹1,600 crore deal underscores Sona BLW’s commitment to diversifying its portfolio and tapping into new growth opportunities in the railway sector.
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