The London-based Hindujas are close to buying out Fiat from Ashok Leyland. Fiat holds 15 per cent in the company through a London-based investment firm that has a controlling stake of 51 per in Ashok Leyland.
The Hinduja family and Iveco, a part of the Fiat group and also Europe's leading truck maker, had acquired the investment firm, Land Rover Leyland International Holdings Ltd, in 1987. The Hindujas hold nearly 70 per cent in LRLIH, while the balance is with Iveco.
Iveco's holding translates into a 15 per cent stake in Ashok Leyland. The Hindujas will shortly acquire Iveco's 30 per cent stake in LRLIH. Sources close to the developments said the Hinduja family's move to scale its holding in Ashok Leyland was in step with a plan to increase the company's presence in the country.
A spokesperson for Ashok Leyland declined to comment, saying it was a bilateral issue. A spokesperson for the Hinduja group said he was "not in a position to comment on the issue at this stage".
The sources said the buyout of Iveco's stake by the Hindujas would not affect the recently signed agreement between them to widen the areas of cooperation.
The scope of the arrangement between the two includes development of a range of products such as light commercial and heavy commercial vehicles conforming to Euro IV emission standards and joint exploration of export markets.
Iveco is strong in Russian and Latin American markets, and also has a presence in China.
Ashok Leyland had introduced new-generation vehicles fitted with Iveco engines from its Hosur plant long ago. Later, the company used Japanese major Hino's engine to launch new products.
Ashok Leyland had entered into new technology agreements with Hino Motors of Japan and ZF of Germany for complementing its in-house research and development efforts and developing complementary components and aggregates.
Dheeraj Hinduja, the son of Gopi Chand Hinduja, is expected to take over the business of Ashok Leyland as part of the family's plan to hand over responsibilities to the next generation.
He is expected to move base from London to India permanently, most probably to Chennai, where the company is headquartered. Ashok Leyland has recently announced plans of entering the passenger car segment.
The deal
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LRLIH, A: 70:30 JV between the Hindujas and Iveco, holds 51 per cent in Ashok Leyland
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This gives Fiat a 15 per cent interest in Ashok Leyland
- Hindujas to buy out Iveco from the joint venture
