THE Yash Birla group has bought the 44.5% stake held by US-based
Kennametal in JV firm Birla Kennametal for approximately Rs 100 crore.
After the purchase, Yash Birla group holds 88.48% in the Mumbai-based
auto component firm. The group has routed the stake purchase through
Shearson Trading & Investment Company, an investment arm of the
â€œThe equity purchase is part of the ongoing restructuring exercise. Though Kennametal exited from the JV, our business relations will continue. Kennametal will source majority of our products for the next five years for their global supply,â€ auto component and engineering division CEO Praveen Gupta said.
The Yash Birla group is in the process of restructuring its Rs 2,500-crore business empire that spreads across many sectors like engineering, auto component, textile, power and lifestyle. The restructuring exercise among six listed and 14 unlisted entities will see mergers, formation of holding companies and acquisitions.
The group is forming a holding company merging its auto component firms â€” Birla Kennametal, Dagger Forst, ITM and Birla Peruccini â€” as a single entity. The group is investing around Rs 200 crore for the expansion activities of the four companies.
â€œThe equity purchase from Kennametal is the first step in the group restructuring. We are very upbeat about this sector and are going to invest considerably in the coming years to ensure that this pace and momentum of growth is maintained,â€ Birla group officials said.
Currently, Birla Kennametal is expanding its manufacturing capacity and entering into new product categories.
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