Germany-based Knorr-Bremse Group is poised to pay more than Rs 4,000 crore to acquire Escorts Kubota's railway division. The article also indicated that the deal would probably be announced in a few days.
Escorts Kubota and the Knorr-Bremse Group were also contacted in writing by CNBC-TV18 for their opinions on the subject.
Escorts Kubota has not yet responded, but the Knorr-Bremse Group has responded, saying that "as a general rule, we do not comment on specific M&A topics."
Ten percent of Escort Kubota's overall revenue comes from the railway sector, which has tripled in the previous ten years. In FY23, the segment reported revenue of Rs 842 crore, an increase of 33 per cent from the previous fiscal.
It should be noted that the tractor manufacturer's promoter company, Kubota Corporation, has no discernible involvement in the trains industry.
The railway division of Escorts Kubota accounted for 10 per cent of the company's overall top line as of the fiscal year 2023. Over the past ten years, its share has tripled.
Around the financial year 2014, the same company's share of the total top line was just 3.1 per cent.
Shares of Escorts Kubota are currently trading at Rs 3,399.95 apiece.
German company Knorr-Bremse AG has been in business for more than 110 years and specializes in the production of braking systems for rail and commercial vehicles. Intelligent door systems, control elements, air conditioning systems for rail vehicles, torsional vibration dampers, and transmission control systems for commercial vehicles are further goods in the range of Group.
Escorts Kubota Limited is an Indian multinational company.It was formerly known as Escorts Limited. The firm engages in the manufacturing of agricultural equipment, construction equipment, material handling equipment, and railroad equipment. The company is headquartered in Faridabad, Haryana.