Knorr-Bremse Group to Acquire Railway Division of Escorts Kubota for Rs. 4,000 Crore

Germany-based Knorr-Bremse Group is set to acquire the railway business of Escorts Kubota for over Rs. 4,000 crore, according to a CNBC-TV18 report. The deal is likely to be signed in the next few days.

Knorr-Bremse Group has confirmed the development but declined to provide more details, while Escorts Kubota refused to comment.

The railway business represents for about 10% of Escorts Kubota’s revenue and has made a threefold growth in the last 10 years. In FY2023, the segment registered a revenue of Rs. 842 crore, up 33% from the previous fiscal.

Last month, there were reports that Escorts Kubota was planning to sell its railway division to focus on its core business.

Knorr-Bremse’s portfolio primarily focuses on manufacturing brakes and safety-related subsystems for rail and commercial vehicles. Both Knorr-Bremse and Escorts Kubota are major suppliers to the Indian Railways.

Shares of Escorts Kubota rose 0.22% to Rs. 3,401 on Wednesday. On Tuesday, the shares had hit a record high of Rs. 3,440, up 5%. Brokerage firm DAM Capital Advisors has a bullish outlook on the stock, with an expectation of 60% growth in the next 12 months. DAM Capital has a buy rating on the stock with a target price of Rs. 5,100.