-
ALSO READ
Fiat Chrysler close to completing turnaround as truck push lifts margins Market turns positive after initial slide Motherson Sumi Systems jumps on acquisition Britain's Melrose raises GKN bid to $11.2 billion in final offer Stuttgart prosecutor investigates Bosch over Chrysler emissions role -
Fitch Ratings today said it expects Netherlands-based Samvardhana Motherson Automotive Systems Group BV's credit profile to benefit from its proposed acquisition of Reydel Automotive Group (Reydel).
The acquisition is beneficial for the company because the transaction is moderately sized and will enhance its business diversification, Fitch said in a statement.
On April 2, Samvardhana Motherson Automotive Systems Group BV's, which is a step-down subsidiary of Motherson Sumi Systems Ltd (MSSL), announced that it has inked a pact to acquire interior components and modules manufacturer Reydel for USD 201 million.
"Fitch believes the transaction is a good strategic fit for SMRP BV and it will help the company achieve growth while enhancing business diversification," it said.
Leading French auto OEMs such as PSA and Renault account for nearly half of Reydel's revenues. This complements Samvardhana Motherson Automotive Systems Group BV's existing customer base, in which German auto OEMs, such as Audi, Daimler and Volkswagen, hold the top positions, it added.
"The transaction will also increase the contribution from instrument panels, leading to greater balance across product categories," Fitch said.
The rating agency further said it does not foresee material financial risks associated with the transaction.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
RECOMMENDED FOR YOU