Mumbai: Pune–based Kinetic Motor Co. Ltd (KMCL) is set to merge with Kinetic Engineering Ltd (KEL), the two companies said in a joint statement.
The merger of the firms, part of the Firodia Group, will help the automotive business by creating substantial synergies including enhanced financial strength, the statement said.
The merger marks the conclusion of restructuring undertaken by the group in recent years. As part of the exercise, Kinetic Engineering, the group’s manufacturing and engineering entity, was restructured and positioned to operate in the automotive systems and components business, while the two-wheeler business under Kinetic Motor Co. was hived off to a new joint venture company with the Mahindra and Mahindra Group.
KMCL transferred its operating assets relating to the two-wheeler business from KMCL to Mahindra Two Wheeler (MTWL) Ltd in November 2008, for cash and 20% stake in MTWL.
Sulajja Firodia Motwani has been appointed as the vice chairperson of KEL. “We intend to build KEL’s current automotive systems business to a size of Rs. 500 crore per year in the next three years and also aim at creating further value through the strategic tie up, ” said Arun Firodia, chairman of KEL in the statement. KPMG has been appointed as the tax and structuring adviser for the merger.