Motherson Sumi to buy Mexico based Electrical Wiring Interconnection Systems business of Bombardier

The automotive component manufacturer, Motherson Sumi Systems has declared the signing of a sale and purchase agreement to acquire the Electrical Wiring Interconnection Systems business of Canadian firm, Bombardier Transportation in Mexico.

The acquisition was conducted through Motherson’s Mexican subsidiary Motherson Rolling Stocks S. de R.L. de C.V. (MRS).

With this acquisition it is expected that Motherson’s rolling stock component manufacturing business in the railway sector in the American continent will be strengthened.

“The transaction includes the transfer of assets, employees and inventories, on a debt-free and cash-free basis and is valued at around US $ 10 million approx. (subject to customary adjustments). The revenue of the said business was $ 25 million for calendar year 2019. The transaction is subject to customary closing events and expected to complete in Q4 FY20-21," said the company in a statement.

In 2019 Motherson Sumi took over Bombardier’s rolling stock electrical component and systems business in the United Kingdom.

“Our focus is always on adding value to our customers' supply chain and catering to their requirements. This is another step forward in that direction. We are further strengthening the relationship with Bombardier under the global partnership agreement and our collective strength will position us as a preferred solutions provider to our customers in the rolling stock business," said, Vivek Chand Sehgal, Chairman, Motherson Sumi.

“The global rail market is extremely dynamic and has become increasingly competitive. Bombardier Transportation aims to enhance its adaptability and agility to changing market conditions, in order to continue to increase its competitiveness and improve its global footprint. This divestiture is in alignment with our global transformation strategy of reducing the activities to our core- and integrating competencies", said Jim Vounassis, Chief Operating Officer, Bombardier Transportation.

Last month Motherson Sumi announced its strategy to diversify into sectors like aerospace, defense and Information Technology, to reduce dependence on the automotive component manufacturing.