India’s Mahindra, Spain’s CIE Merging Parts Operations

MADRID – Indian auto maker Mahindra and Spain’s CIE Automotive sign an agreement that could create an automotive components supply network with combined annual sales of $3 billion with operations in North America, South America, Europe and Asia.

CIE, through its Brazilian affiliate Autometal, will acquire from Mahindra a stake in the Indian auto maker’s listed and unlisted companies belonging to its Systech Automotive Component business. CIE will contribute its forging operations in Spain and Lithuania.

Mahindra and CIE will consolidate all the businesses under the name Mahindra CIE, a company that will continue to be listed on the Bombay Stock Exchange and the National Stock Exchange of India.

Sources within CIE say the transaction will leave Mahindra with a 13.5% stake in the Spanish company, becoming its second-largest shareholder. CIE will have a market value of €214 million ($280 million).

The agreement will integrate 10 plants in India and six in Europe employing about 8,000 and 2,000 people, respectively, and will enable CIE to increase its annual sales from €2.1 billion to €2.2 billion ($2.9 billion).