Al Futtaim acquires 75pc stake in Sri Lankan firm
DUBAI— Dubai's business conglomerate, Al Futtaim Group, yesterday acquired 75 per cent shares of Associated Motorways plc (AMW) of Sri Lanka, and said it would buy the remaining stakes over the next couple of weeks in a deal worth Dh300 million.
Bob Farrow, Senior General Manager, Business Development, Al Futtaim Automotive, told Khaleej Times that the group would make significant investments in the $100 million AMW to expand its manufacturing operations after the full acquisition. Projects in the pipeline include an automobile assembly plant in cooperation with India's Maruti Suzuki, and expansion of AMW's tyre manufacturing unit. Also under planning is to set up a facility for human resources training. Farrow said AMW's management would induct some senior executives from the Dubai-based group.
Ajita De Zoysa, Chairman of AMW and its corporate parent AEC, said AMW is on the threshold of making several large investments, including a major real estate development. "These opportunities have been the catalyst for this acquisition and which, through Al Futtaim's role as a strategic investor in the business, will transform AMW into a multinational corporation. There will be continuity and I am pleased to announce that Al Futtaim has proposed that my brother Deshabandu Tilak De Zoysa succeeds me as Chairman of the AMW Group.”
The Sri Lankan bid follows Al Futtaim's recent acquisition of Singapore's prestigious retailer Robinson Group, said Farrow. “We have very big plans for AMW. It is an extremely good business that has been one of the cornerstones of Sri Lanka's manufacturing and automotive sector. Al-Futtaim will bring new investment and management to build on AMW's considerable achievements since it was founded almost 60 years ago.
Al Futtaim completed purchase of 75 per cent shareholding yesterday by buying four per cent more shares at a price of Dh6 per share.
Earlier yesterday, Al Futtaim notified the Colombo Stock Exchange (CSE) that it had paid in excess of Dh165 million to acquire the 51 per cent holding in AMW held by Associated Electrical Corporation plc. The stake in the listed tyre manufacturer to autos distributor was bought by Al Futtaim group's wholly-owned subsidiary Al Futtaim Engineering, which later purchased a further 20 per cent of AMW's shares held by investment holding company John Keells.
Farrow said the acquisition was in line with the automotive development division's strategy, with the group's global strategy, and the direction in which CEO Omar Al Futtaim wants to take the business. AMW portfolio includes distributorships of Maruti, Nissan, Renault, Suzuki, Yamaha, Piaggio, Goodyear tyres, Castrol and BP.
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