Motherson Sumi rose over 3% to Rs 338 during early-morning trade in an otherwise lower market after reports that the company will buy truck wire maker PKC Group for 571 million euros ($ 609 million).
The company has offered 23.55 euros per PKC share, representing a 51% premium to PKC's closing price on Thursday.
“MSSL had stated direction to grow more in the commercial vehicle segment and this step is in the right direction. Leveraging these opportunities and the capabilities, the combined company will accelerate growth and profitability improvement. By offering a larger product portfolio as well as enhanced capabilities and scale, the combined entity will add more value to its customers and suppliers,” said Motherson Sumi Systems in a press release.
PKC designs, manufactures and integrates tailored electrical distribution systems and related architecture components, vehicle electronics, wires and cables especially for trucks and buses, light and recreational vehicles, construction equipment and agricultural and forestry equipment. In addition, PKC designs and manufactures electrical cabinets, power packs and electrical distribution systems for leading rolling stock manufacturers.
"Combining the two companies will create a leading supplier of wiring systems and components for the worldwide transportation industry," PKC said in a statement. The Finnish company said its board backs the offer.
The stock was trading at Rs 335 at 11 am on BSE. A total volume of 3.13 lakh shares exchanged hands as compared to its 2-week average of 8 lakh shares