ASHOK LEYLAND TO BUY 26% STAKE IN OPTARE
India’s second-largest commercial vehicle manufacturer, Ashok Leyland (part of the London-based Hinduja Group) has agreed to buy a 26% stake in Leeds-based Optare. The money - £5m before expenses - will be raised by the issue of new Optare shares, which the board is recommending that shareholders should approve at a General Meeting on 16 August.
News of a potential partner for Optare was revealed earlier in the year, with a deal originally expected to be announced by the end of June. Under the deal, Optare will “be a part of Ashok Leyland’s global strategy for buses,” says the firm.
Optare says that the deal is “expected to further benefit Ashok Leyland in its endeavour to accelerate technology, new product development and to address new markets.”
While Ashok Leyland will have access to Optare’s technology (including its bus range which “will appeal to several global markets”) in turn, Optare will “seek to improve its competitiveness through access to Ashok Leyland’s lower-cost supply chain.”
Ashok Leyland will have two representatives Optare’s board.
Optare CEO Jim Sumner says: “We are delighted, and firmly believe that in Ashok Leyland we have found the perfect strategic partner to help Optare realise its full potential by providing best cost sourcing, technology sharing, new distribution channels and joint product development activity.”
