Sona BLW precision to acquire Escort Kubota’s railway business

24 Oct 2024 , 02:25 PM

The board of Sona BLW Precision Forgings Ltd. (Sona Comstar) approved the acquisition of Escorts Kubota’s Railway Equipment business.

Following this development, Sona BLW Precision was trading 13.10% higher at ₹728.50, against the previous close of ₹644.10 on NSE. The counter rose to an intraday high and low of ₹740.65, and ₹663.75, respectively.

The acquisition of the ‘Railway Equipment Division’ firm costs ₹1,600 Crore.

Sona BLW has agreed to acquire Escort Kubota’s ‘Railway Equipment Division’ company as a going concern on a slump sale basis. Furthermore, no shareholding or control of Escorts Kubota is planned for acquisition by the company.

The company also informed that Escorts Kubota’s railroads business generated ₹950 Crore in FY 2024. As of the June quarter, the railway business generated 11% of the company’s total revenue.

Sona BLW was earlier reportedly in talks with Escorts Kubota to acquire the latter’s railway business, according to persons familiar with the situation. According to insiders, the sale was estimated to be worth ₹2,000 Crore at the time.

According to reports, the acquisition is consistent with Sona BLW’s diversification strategy, and the Railway Equipment Division is a market leader in the railway brake category, which will serve as a moat for Sona BLW due to high entry hurdles and rigorous quality control methods.

For feedback and suggestions, write to us at [e-mail]