homemarket NewsKnorr Bremse Group likely to buy Escorts Kubota's railway business for over Rs 4,000 crore: Exclusive
Knorr-Bremse Group likely to buy Escorts Kubota's railway business for over Rs 4,000 crore: Exclusive
Escorts Kubota's railway business is likely to fetch a sum of over Rs 4,000 crore, sources with knowledge of the matter told CNBC-TV18.
Knorr-Bremse Group, Germany's largest rail-tech supplier is likely to buy Escorts Kubota's railway business, sources with knowledge of the matter told CNBC-TV18. The deal is likely to be announced in the next few days.
Escorts Kubota's railway business is likely to fetch a sum of over Rs 4,000 crore, the sources added.
Knorr-Bremse makes braking and safety-relevant sub-systems for railways and commercial vehicles. Both Knorr-Bremse and Escorts Kubota are major suppliers to the Indian Railways.
CNBC-TV18 has written to Escorts Kubota for a comment and is awaiting a reply.
"As a principle, we do not comment on specific M&A topics," Knorr-Bremse wrote to CNBC-TV18 in response to the query.
CNBC-TV18 was the first to report on August 29 that the tractor manufacturer Escorts Kubota is considering the sale of its railway business to concentrate on its core tractor business.
One must take note of the fact that Kubota Corporation, which is now the promoter entity of the tractor manufacturer, has no notable presence in the railways segment.
For the financial year 2023, Escorts Kubota's railway business reported revenue of Rs 842 crore, which was a growth of 33 percent from the previous financial year.
As of the financial year 2023, Escorts Kubota's railway business comprised 10 percent of the overall top line. Its share has tripled over the last decade. Around the financial year 2014, the same business had a share of just 3.1 percent of the overall top line.
Shares of Escorts Kubota are currently trading little changed at Rs 3,396.80.
(Edited by : Hormaz Fatakia)
First Published: Oct 11, 2023 9:00 AM IST
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