Mahindra to acquire Metalcastello, Italy

Mahindra & Mahindra and ICICI Venture Funds Managements have formed a consortium to acquire a 100 percent stake in Metalcastello S.p.A, a leading Italian independent gear manufacturer. The transaction is subject to receipt of necessary approvals.

According to Hemant Luthra, president of Mahindra’s auto components division Systech, “Mahindra Forgings has already created one of the leading forging companies in the world. Together with ICICI Venture, we expect Metalcastello S.p.A, an outstanding company with a 50-year history of serving its customers profitably, to help replicate in the gear vertical what MFL has achieved in the forgings space. The customer base of both MFL and Metalcastello is complementary and will enhance the synergies that we are already harvesting. Consistent with Mahindra Systech’s ‘art to part’ expertise, Metalcastello S.p.A perfectly complements this capability in the auto component space and will add immense value to its stakeholders.”

The Mahindra Group holds a majority stake in Rajkot-based gear manufacturing company Mahindra SAR Transmission and this acquisition augments Systech’s ability to serve its customers from multiple locations namely Italy, UK, Germany and India for their auto component needs. It also strengthens the Mahindra Group’s position as a leading auto component player in the global market.

Metalcastello, based near Bologna, has revenues of around US $100 million .The company was originally founded in 1952 and is among the top gear manufacturers in Europe, focused primarily on the off-highway segment. Its product portfolio includes complex gears and shafts for use in vehicle transmissions and drivelines. Its customer portfolio includes most of the global OEMs in the tractor, off highway and construction equipment sector. Currently, financial investors hold 84.7 per cent of which 66.5 per cent is held by private equity fund Development Capital, and top management holds 15.3 per cent in Metalcastello.