Tata Motors acquires Hispano Carrocera

Tata Motors acquires Hispano Carrocera, the Spain-based maker of buses and coaches

Tata Motors, the biggest automobile manufacturer in India, has bought full control of Hispano Carrocera SA, the Spain-based maker of buses and coaches, by acquiring the rest 79% stake in the Spanish company.

Tata Motors had acquired a 21% stake in Hispano Carrocera at a total cost of euros 12 million in 2005, with the deal having included equity, technology licensing, and debt. It obtained the remaining 79% in the firm by way of exercising the existing call option, through mutual agreement with Investelia SA Spain, the other shareholder, the Indian automaker giant said in a statement.

However, Tata Motors did not reveal the size of the buyout deal.

In the statement, Tata Motors stressed that the acquisition of the Spanish automaker would help strengthen its current efforts aimed at improving its “operational efficiencies” like cost-reduction, development of new products as well as productivity in order to enhance the market share and boost the brand value.

Ravi Kant, the executive director of Tata Motors, received the share certificates from Gerardo Mugica, the chief executive officer of Hispano Carrocera SA, at a meeting held in Madrid, the capital of Spain. On the occasion, Ravi Kant said that the Tata Motors-Hispano Carrocera partnership gives the two firms a chance to use their “complementary strengths” in order to come up with high-class transport solutions for both intra-city and inter-city mass transportation in India and Spain as well as in many other countries across the world.

Ravi Kant also has taken over as the chairman of Hispano Carrocera.

Now, with the signing of the investment agreement, Tata Motors will get the licence for technology as also the brand rights from Hispano Carrocera.

Hispano Carrocera SA is Spain’s established and famed maker of buses and coaches and is known for developing high-quality vehicles, Tata Motors said in the statement.

Hispano Carrocera has two manufacturing facilities – one in Zaragoza (Spain) and the other in Casablanca (Morocco, in North Africa.)

This is the first overseas mergers and acquisitions (M&A) deal – though not a fresh one, in the strict sense – that Tata Motors is signing after it bought Ford Motor Company’s world-renowned Jaguar Land Rover for $2.5 billion in 2008.

Recently, the Tata Group had raised funds to the tune of $750 million by issuing convertible bonds and global depositary receipts. At the end of June 2009, the Tata Group had a consolidated debt of about $5.2 billion.