By an agreement it has been announced that the Hinduja Group has acquired Iveco’s 30 percent stake in Machen Iveco Holding SA which, through its wholly-owned subsidiary LRLIH Ltd UK, has around a 51 pct shareholding in Ashok Leyland Ltd as well as owning 59 pct of Ennore Foundries Ltd.

The partnership between the Hinduja Group and Iveco dates back to their 1987 acquisition of LRLIH from the Rover Group (UK). LRLIH’s shareholding in Ashok Leyland was then 40 pct, which was increased to 51 pct in 1994. Ashok Leyland, which controls around 30 pct of the Indian commercial market, produces consisted profits and is building a growing profile internationally. However the Fiat Group last year signed a Memorandum of Understanding with the firm's biggest national rival, Tata Motors, to explore all areas of co-operation, and which is expected to see eventually see a collaboration being formed in the area of truck manufacturing. Selling their stake in Ashok Leyland, which anyway is regarded as a non-core shareholding will also clear any conflict with Tata Motors.
 

In a joint statement, Mr. G P Hinduja, President, Hinduja Group, and Mr Paolo Monferino, Chief Executive Officer, Iveco, said: “The Hinduja Group and Iveco are proud of the rapid strides made by Ashok Leyland in product and process technologies over the last two decades. In view of the changed business plans of both the partners and considering the strategic priorities for Ashok Leyland and Iveco in the emerging global scenario, we have mutually agreed to pursue our goals independently, in the spirit of mutual respect and goodwill adopted during our long partnership”. The transaction will be settled in cash at closing.