Sona Comstar to advance completion of railway business purchase from Escorts Kubota

Auto component maker Sona BLW Precision Forgings Ltd (Sona Comstar) on Monday, said it has decided to bring closer the deadline for executing the acquisition of Escorts Kubota's railway business and change the way the payment will be made.

In October, Sona Comstar announced the acquisition of Escorts Kubota’s railway equipment business for Rs 1,600 crore with plans to close the transaction on September 30, 2025. 

As per the amendment announced in an exchange filing on Monday, Sona Comstar now plans to complete the acquisition by May 1, 2025. Also, a portion of the consideration for the transfer of railway business will be kept in an escrow account and released to Escorts Kubota in tranches upon completion of certain milestones. The company noted that there is no change in the consideration to be paid to Escorts Kubota for the acquisition.

Gurugram-based Sona Comstar manufactures components such as differential assemblies, differential gears, starter motors, BSG systems, EV traction motors, motor control units, alternators, and transmission gears. The company aspires to become one of the world's most respected and valuable mobility technology companies, and the new acquisition is in line with the vision and mission statement of the company in the mobility space.

Escorts Kubota’s business is largely focused on the agriculture and construction equipment sectors. Its railway business involves manufacturing, assembly and sales of products such as brakes, couplers, suspension systems, and friction and rubber products.

Meanwhile, Sona Comstar’s board has approved plans to acquire a land parcel from Escorts Kubota in Faridabad, which is adjacent to the land of railway equipment business of Escorts Kubota, for Rs 110 crore.

“The acquisition of the land parcel is in line with its plan to pursue strategic and growth opportunities. This transaction will enable the company to expand in the future,” Sona Comstar said.