Automobile manufacturer Mahindra Group has signed a contract with the Spain based auto parts manufacturer CIE Automotive to form a joint venture (JV) in order to expand operations of both the companies.
Under the deal, Mahindra Group will acquire 13.5% share in CIE Automotive in Spain to become the second largest shareholder in the company, while CIE will acquire share in the Mahindra's Systech Automotive Component business in India.
The JV will be renamed as Mahindra CIE, a global automotive component supply network that is expected record combined annual sales of about EUR2.2bn/$3bn with operations in North America, South America, Europe and Asia.
Mahindra Group chairman Anand Mahindra said the alliance with CIE enables the company to rise above competition, quickly extends its reach into new geographies, and grow its collective product portfolio in the coming years.
"Eight years ago, we at Mahindra set out to build an Indian automotive supplier with a global footprint and this drove a series of acquisitions in India and Europe for us," Mahindra said.
Following the acquisition of the shares, CIE will continue to operate the current Systech automotive component businesses globally, while including CIE's European forgings operations.
Both the companies expect to expand their automotive components business across the globe with the JV.
