The Board of Directors of Samvardhana Motherson International has formally approved the acquisition of Nexans Autoelectric business for an enterprise value of €207 million, marking a significant expansion in the automotive wiring harness segment.

Board Meeting and Regulatory Filing

The board meeting held on December 22, 2025, from 13:15 Hours to 14:30 Hours (IST), approved the acquisition by Motherson Global Investments B.V. (MGI B.V.), an indirect wholly-owned subsidiary of the company. The transaction involves acquiring the business including assets and certain real estate of Nexans autoelectric GmbH and Elektrokontact GmbH, along with shares in their foreign subsidiaries.

Business Profile and Financial Performance

Autoelectric is a 60-year-old global manufacturer of automotive wiring harnesses for light vehicles and commercial vehicles, specializing in both low and high voltage applications. The company reported revenues of €749 million in CY2024, with passenger vehicles contributing 81% and commercial vehicles 19% to total revenues.

Global Operations and Market Presence

The target company operates 22 facilities across 11 countries including Germany, United States, Mexico, China, Tunisia, Ukraine, Romania, Slovakia, Czech Republic, Austria and Switzerland. The business employs over 13,000 people globally, supported by more than 800 engineers.

Strategic Rationale and Regulatory Approvals

The acquisition aims to enhance Motherson's presence with passenger vehicle OEMs globally and provide access to experienced management teams with strong R&D capabilities. The transaction is expected to be cash EPS accretive and synergistic with the company's existing wiring harness division.

Merger control clearance is required from the European Commission and national merger control authorities of Brazil and the United States, along with clearance from the Committee on Foreign Investment in the United States. The transaction is subject to satisfactory completion of all conditions precedent, including regulatory approvals and consultations with the works council.

Transaction Structure and Guarantee Arrangements

Samvardhana Motherson Automotive Systems Group B.V. will act as guarantor in the master framework agreement with respect to the purchaser's obligations. The potential transaction follows entering into exclusive negotiation and signing of a master framework agreement, under which a series of shares and asset purchase agreements will be executed to transfer interests in multiple subsidiaries and assets in Autoelectric.

Samvardhana Motherson International Limited has informed stock exchanges about a penalty order received by its wholly-owned subsidiary SMR Automotive Systems India Limited from Tamil Nadu tax authorities. The disclosure was made under Regulation 30 of SEBI Listing Regulations on December 14, 2023.

Penalty Details and Authority

The Commercial Tax Officer in Kancheepuram (Rural), Tamil Nadu, issued the penalty order dated December 13, 2023. The regulatory action was taken under multiple GST provisions, highlighting compliance issues across different tax categories.

Nature of GST Compliance Issues

The penalty order was issued primarily on multiple grounds related to GST compliance and documentation. The tax authorities identified several areas where the subsidiary allegedly failed to meet regulatory requirements.

The key issues cited in the order include:

• IGST/ITC Discrepancies: Import transactions not appearing in Form 2A/2B
• Service Income Documentation: Non-payment of tax due to missing BRC/FIRC submissions related to service income
• Invoice Linkage Problems: Absence of proper linkage between debit and credit notes with corresponding original invoices
• Export Documentation: Non-consideration of export sales as zero-rated supplies due to non-submission of shipping bills

Company Response and Impact Assessment

Samvardhana Motherson International has clarified that the penalty will not materially affect the company's operations or financial performance. The parent company emphasized that the regulatory action is specific to its subsidiary and does not indicate broader compliance issues.

Legal Recourse and Next Steps

The company has announced its intention to challenge the penalty order through proper legal channels. SMR Automotive Systems India Limited plans to file an appeal against the order to the Appellate Authority within the statutory timeline, indicating the company's confidence in its position regarding the alleged violations.

This regulatory disclosure demonstrates the company's commitment to transparency and compliance with stock exchange requirements, ensuring investors are informed about material developments affecting subsidiary operations.