Cummins in talks to buy Kirloskar Oil Engines for over $500 mn

MUMBAI: The Cummins Group, one of the world’s largest manufacturers of engines and power generation products, is in talks to acquire a controlling stake in Kirloskar Oil Engines Ltd in a deal valued at over $500 million through one of its Indian subsidiaries, two people aware of talks between the companies said.

Mint reported on December 5 that the Kirloskar group was in talks to exit its diesel generator set business. Ambit Capital is advising Kirloskar on the deal, the people cited above said, speaking on condition of anonymity.

Kirloskar Oil Engines, among the Pune-based group’s leading businesses, makes diesel generators ranging in power output from 5kVA to 3,000kVA. The Kirloskar group, founded in 1888 by Laxman Rao Kirloskar, currently clocks over $3.5 billion a year in revenue.

Emails sent to Kirloskar group, Cummins India and Ambit Capital remained unanswered till press time on Monday.

“There have been initial rounds of discussions with several potential buyers, including a few global private equity funds, but talks with Cummins are progressing well,” one of the people cited earlier said, adding that “the acquisition is a natural fit for Cummins which is largely present in the segment and will consolidate its market position”.

Cummins in India has eight legal entities with a combined turnover of ₹10,880 crore in 2016.