Escorts Kubota Ltd, a prominent player in the farm and construction equipment sector, announced on Wednesday its decision to sell its railway equipment division to Sona BLW Precision Forgings Ltd for ₹1,600 crore. The companies have finalized a business transfer agreement, allowing the transfer of the railway equipment division (RED) as a going concern on a slump-sale basis.
This transaction, valued at ₹1,600 crore, is contingent upon the terms outlined in the agreement. The decision to divest the railway equipment division is part of Escorts Kubota’s strategic shift to concentrate on its agricultural and construction equipment sectors. The company aims to streamline operations and reallocate capital, which it believes will enhance the scale and efficiency of its core businesses.
Nikhil Nanda, Chairman and Managing Director of Escorts Kubota, stated that by sharpening its focus on its primary divisions, the company intends to maximize value for stakeholders and reinforce its status as a leader in the agri and construction equipment markets.
The railway equipment division is a key supplier in India, providing components such as brakes, couplers, suspension systems, and various friction and rubber products. It also has several new products under development, including HVAC systems, electrical control panels, vacuum evacuation systems, and automatic plug doors.
For Sona BLW Precision Forgings, the acquisition is in line with its strategy to broaden its footprint in the mobility sector and will enhance its clean mobility product range by integrating the railway components business.
Escorts Kubota Limited is a prominent Indian engineering company specializing in agricultural machinery, construction equipment, and railway equipment. Established in 1944, the company has played a pivotal role in transforming India’s farming and infrastructure sectors.
In 2021, Escorts entered a strategic partnership with the Japanese multinational Kubota Corporation, further strengthening its global presence and technological capabilities. Escorts Kubota is well-known for its wide range of tractors, harvesters, and implements that cater to diverse agricultural needs, offering advanced technology and efficiency to farmers.
The collaboration with Kubota has allowed Escorts to expand its product portfolio, emphasizing innovation, sustainability, and smart farming solutions. With a strong focus on rural development and mechanization, Escorts Kubota continues to drive advancements in agriculture and construction, contributing significantly to India’s economic growth.
