VOLVO, the world’s no. 2 truckmaker, seems to be the front-runner to buy a majority stake in Eicher Motors, according to people familiar with the situation. Eicher is likely to make the announcement to this effect on Monday.
Truckmaker Eicher has been in talks with ‘several’ companies for a strategic partnership that would help it become a significant player in the heavy commercial vehicles (CV) segment. Its objective is to emerge from a mid-size player to a truly large full-range CV company. Earlier, the company was reportedly in advanced talks with Daimler, though the negotiations fell through.
When contacted, Eicher MD and CEO Siddhartha Lal refused to comment on the strategic partnership. Volvo officials too refused to comment.
Incidentally, late last week, the market was abuzz with speculation that Eicher was striking a deal with Volvo, spiralling its stock up by 8% to close at Rs 545 on the Bombay Stock Exchange. In the last one month, the Eicher stock has risen 27% on the BSE.
Sources said Volvo would acquire the majority stake in the company either from the promoters or through a preferential route