Motherson Group likely to acquire Marelli

The parent company of Motherson Sumi, Motherson Group is likely to acquire Italian automobile components manufacturer Marelli. Motherson Sumi, by revenue, is India’s largest automobile components maker. As per a report by the Economic Times, if the deal is successfully inked, it will make Motherson Sumi one of the top-ten auto component makers in the world. In the past, Motherson Sumi has already partnered with Marelli.

It partnered with the Italian company to manufacture suspension, heating, ventilation, air conditioning, and automotive lighting systems. In the last fiscal year, Marelli clocked a revenue of $11 billion but had to go through a debt restructuring with liabilities of over $8 billion. Marelli is a bigger company than Motherson Sumi, however, it has been struggling financially.

Currently, the market capitalization of Motherson Sumi stands at a little over $8 billion. In the domestic market, Motherson Sumi competes with Minda Industries and Sona Comstar but their market capitalization is much less than Motherson. A report by Geojit stated, “The company’s scheme of reorganization continued as expected, and this lays the foundation for Motherson 2.0.” Another report by ICICI Direct said: “We maintain hold rating on the stock amid slower-than-anticipated recovery in passenger vehicle auto volumes globally amid persisting chip shortage.”