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BW Businessworld

Citgroup Buys Stake In Eicher, Volvo Sells Shares

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Foreign fund house Citigroup Global Markets Mauritius on Wednesday acquired shares worth more than Rs 619 crore in Eicher Motors, in which Swedish company Volvo sold 4.7 per cent stake for Rs 1,920 crore.
A total of 4,09,675 shares (representing 1.15 per cent stake) of Eicher Motors were purchased by Citigroup Global through a bulk transaction on stock exchange BSE.
Shares of the company were picked up for an average price of Rs 15,111 apiece, amounting the total value of the transaction at Rs 619.06 crore, as per bulk deal data of bourses.
Swedish commercial vehicle major AB Volvo on Tuesday sold around 4.7 per cent stake (12.7 lakh shares) in Eicher Motors for $310 million (over Rs 1,920 crore).
Eicher Motors' 50-50 joint venture with the Volvo group, VE Commercial Vehicles Ltd, designs, manufactures and markets reliable, fuel-efficient commercial vehicles of high quality and modern technology, engineering components and provides engineering design solutions.
Eicher Motors manufactures and markets the iconic Royal Enfield motorcycles.
Shares of Eicher Motors today jumped 1 per cent to close at Rs 16,050.15 apiece, on the BSE.
After the stake sale Volvo now holds around 3.7 per cent of shares in Eicher Motors.
"We are making the assessment that this money is of better use in other parts of our core business," Volvo spokeswoman Kina Wileke said.
Wileke said Volvo no longer needed to hold Eicher Motor shares for accounting purposes, which was the case when the joint venture with the company was set up in 2008.
Volvo said the sale would generate a capital gain of around 2.4 billion crowns and will have no impact on either ownership or control of VE Commercial Vehicle.
Asked whether Volvo would look to exit Eicher Motors in full, Wileke said: "This transaction is what we thought was suitable at the moment. We will have to see what we do in the future."