 New Delhi : Hinduja flagship firm Ashok Leyland on Jul 30 said it will acquire 26 per cent stake in UK- based bus manufacturer Optare for $7.5 million (about Rs 35 crore) as part of its strategy to expand into new markets.
"The deal is expected to further benefit Ashok Leyland in its endeavour to accelerate technology, new product development and address new markets," the company said in a statement.
The acquisition will give the company access to Optare's technology, including a modern range of mid-size and full-size city buses, which can address several global markets, it added.
"This strategic alliance is a critical part of our 'Global Bus' programme, which is under development," Ashok Leyland Managing Director R Seshasayee said. Under the agreement, Ashok Leyland will nominate two nominees on the board of Optare, it said.
Optare, in turn, will seek to improve its competitiveness in the UK and its export markets through access to Ashok Leyland's lower-cost supply chain, co-operation in new product development and improved management of working capital.
"This new venture will deliver direct benefits to UK bus customers while propelling Optare on to the global stage," Optare Non-Executive Chairman John Fickling said.
In 2009, Optare had a turnover of around 80 million pounds. It employs around 500 people on two manufacturing sites at Leeds and Blackburn and produces a wide range of buses of its own design, including double deckers and mini coaches. In 2006, Ashok Leyland acquired Czech company Avia for an undisclosed sum to expand its global footprint.
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