Tata Motors to buy out Hispano

KOLKATA: Tata Motors Ltd is likely to buy out 79% stake in Spanish bus and coach manufacturer Hispano Carrocera, in which it already has a strategic holding of 21%, to make it a wholly owned subsidiary within the next financial year.

The stake hike in Hispano Carrocera, a high-end bus and coach manufacturer with 25% market share in Spain, is part of Tata Motors’ strategy to spread footprint in bus and coach segments in Europe, Africa and Latin America.

The beginning was made in 2005 when Tata Motors picked up a 21% stake in Hispano Carrocera for Rs 70 crore consisting of equity, debt and technology licensing fees. This was followed up in 2006 by setting up a joint venture with Marcopolo Brazil, another global leader in bodybuilding for buses and coaches.

Tata Motors spokesperson said: “Our company does not comment on any plans for mergers, acquisitions or alliances.”

However, highly placed sources in the Tata group said: “Tata Motors has big ambitions of increasing its presence in the bus and coach segment in the geographies it is present, and choose to be in the future. Europe, Africa, India and Brazil are important markets where expansion plans are being worked out. Our associations with Marcopolo and Hispano Carrocera are moves towards creating a web to cater to this segment of the automobile market.”

The shareholders’ agreement between Tata Motors and Hispano Carrocera — signed in 2005 — gives Tata Motors’ the option to buy out the remaining 79% stake within the next five years.