Samvardhana Motherson to acquire frame making ops of DICV

Also, as a part of the transaction SMI, has signed a long-term agreement with DICV for supply of the complete frame assembly, the company said in a statement.

Noida / Chennai / South Korea - Samvardhana Motherson International Ltd¹ (SAMIL) of Noida, the holding company of the Samvardhana Motherson Group (SMG), an automotive parts conglomerate, has signed a strategic agreement to acquire assets of frame manufacturing and assembly operations from Daimler India Commercial Vehicles (DICV).

These operations which were at its facilities in Chennai have been bought at book value. Also, as a part of the transaction SMI, has signed a long-term agreement with DICV for supply of the complete frame assembly, the company said in a statement.

Formerly Motherson Sumi Systems, SMI runs the manufacturing operations of the frame manufacturing facility of DICV. The frame assembly operations are managed by DICV itself in a separate facility. Once the transaction is completed, SMI will own the assets including long term leasehold rights for land and will run end to end operations for frame manufacturing and assembly and supply to DICV under the long-term supply contract.

According to SMI, the development provides a vertical integration opportunity by addition of certain key assets and machinery, and thereby significantly increases the content per vehicle. Furthermore, it will help in changing SMI's status from being a contract manufacturer to the principal manufacturer of frame assembly business.  Post the transaction, for ten years SMI will become the sole supplier of frame assembly to DICV. Also, it will open avenues of similar business models with other OEMs in the country.

Samvardhana Motherson International Limited (SAMIL) is the principal holding company of the Samvardhana Motherson Group, which is one of the world’s fastest growing specialized automotive component manufacturers for original equipment manufacturers (OEMs). The company designs and manufactures components and systems, mainly for the automotive industry, through subsidiaries and joint ventures with partners in the relevant fields. It acts as the central company that binds and manages the different activities of the Group. SAMIL has investments in the group companies including in the flagship company, Motherson Sumi Systems Limited (MSSL). SAMIL provides central support and strategic management direction to the other companies within the group.