a bid to transform itself into a high-tech company and focus on the existing
growth of electronics, connectivity, electrical vehicles (EVs) product lines
and the 2-wheeler segment globally, Varroc Engineering Limited (VEL), India’s
leading automobile component company, has signed a Securities Purchase
Agreement (SPA) with Compagnie Plastic Omnium SE of France to divest its
4-wheeler lighting systems operations in the Americas and Europe.
divestment is part of Varroc’s strategy to align its resources with the high
value and high growth primary markets in China, India, and the two-wheeler
Euro 600 million transaction will see Varroc divesting its lighting System
operations in the USA, Brazil, Mexico, Poland, Czech Republic, Germany, Turkey,
and Morocco Varroc will also continue to operate its China JV and other
international 2-wheeler businesses in countries like Italy and Vietnam and
global electronics businesses in Poland and Romania. The company is retaining
its 4-wheeler lighting operations in Asia.
planned divestment of Varroc’s 4-wheeler lighting systems businesses in the
Americas and Europe will ensure enhanced shareholders’ value, sustainable
growth, and further development of its R&D facilities and engineering
on the development, Tarang Jain, Chairman & Managing Director of Varroc
Engineering said: “Our immediate goal is to be future-ready with continued
profitable growth in emerging sectors like the EV and high technology
electronics. The divestment of our passenger car lighting operations in the
Americas and Europe will be a win-win deal for Varroc and Plastic Omnium. For
us, we unlock great value for all our shareholders, employees, and business
partners as we plan for our next level of growth in the fastest-growing
economies and auto sectors in the world. We will also continue to invest in our
teams and people as we embark on the next phase of our growth.
Favre, Chief Executive Officer of Plastic Omnium: - “Varroc Lighting Systems is
a strategic addition to our business that will provide us with an extensive
lighting product portfolio, a balanced footprint across best-cost countries and
cross-selling opportunities. Building on our operational excellence, financial
strength, and long-term vision we have identified clear levers to bring VLS to
bestin- class operating performance.”
the identified growth area focus, Varroc’s lighting systems and other
businesses in India, namely design, manufacture, and supply of a diverse range
of Polymer, Electrical-Electronics and Metallic components will continue to
enjoy a leadership position in these business segments.
the Indian automobile sector, including 2-wheelers, 3-wheelers, and passenger
car segment, poised to grow at 10-12 % CAGR over the next 4-5 years, and with
emerging alternative technologies in electric vehicle (EV) mobility, Varroc
will be investing in operations and R&D to enhance its shareholders’ value
by creating a robust and financially strong operation, ensuring higher return
on investments. Rothschild & Co acted as the exclusive financial advisor to
VEL on the transaction.
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