Image Source : CNBC TV18
Bharat Forge Ltd (BFL), a global leader in metal forging and automotive components, has officially completed its acquisition of AAM India Manufacturing Corporation Pvt Ltd, marking a strategic leap into the commercial vehicle axle segment. The deal, revised to Rs 770 crore from an earlier estimate of Rs 544.5 crore, reflects stronger-than-expected cash reserves at AAM India and underscores Bharat Forge’s commitment to expanding its domestic and global footprint.
Here’s a comprehensive breakdown of the acquisition and its broader implications.
Key Highlights of the Acquisition
- Bharat Forge has acquired 100 percent equity in AAM India, a subsidiary of American Axle & Manufacturing Holdings
- The acquisition includes axle manufacturing operations in Pune and Chennai, along with the Pune Engineering and Development Center
- The revised deal value of Rs 770 crore accounts for higher cash balances at AAM India as of the closing date, July 1, 2025
- The Competition Commission of India approved the transaction with voluntary modifications
Strategic Rationale and Business Impact
- AAM India is a key supplier of axles for light, medium, and heavy commercial vehicles, making it a valuable addition to Bharat Forge’s product portfolio
- The acquisition strengthens Bharat Forge’s position in the domestic axle market and complements its existing capabilities in forged components
- It also supports Bharat Forge’s broader strategy of adding value-added solutions in the automotive space, including undercarriage assemblies and e-axle systems
Defence Business Restructuring in Parallel
- Bharat Forge is simultaneously restructuring its defence business by transferring select assets to its wholly owned subsidiary, Kalyani Strategic Systems Ltd (KSSL)
- KSSL will issue Optionally Convertible Redeemable Preference Shares worth up to Rs 500 crore to Bharat Forge as consideration
- The restructuring aims to sharpen operational focus and enhance strategic clarity in defence product development and deployment
Forward Outlook
- The acquisition is expected to boost Bharat Forge’s revenue and margin profile in FY26 and beyond
- Integration of AAM India’s operations will enable faster scale-up, improved customer access, and enhanced manufacturing synergies
- Analysts view the move as a pivotal step in Bharat Forge’s transformation into a full-spectrum mobility and defence solutions provider
As Bharat Forge completes the AAM India acquisition, the Rs 770 crore deal signals more than just expansion—it reflects a bold vision to consolidate leadership across automotive and defence verticals with precision, scale, and strategic foresight.
Sources: Financial Express, CNBC-TV18, India Infoline
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