CCI Approves Bharat Forge’s Full Acquisition of AAM India with Modifications

AAM India Manufacturing Corporation Private Limited (AAMCPL), on the other hand, is primarily engaged in the manufacturing and sale of axles for commercial vehicles in India.

The Competition Commission of India (CCI) has officially approved the proposed acquisition of 100% equity shareholding of AAM India Manufacturing Corporation Private Limited (AAMCPL) by Bharat Forge Limited (BFL). The approval is contingent on the implementation of voluntary modifications submitted by the involved parties to address potential competition concerns.

Background of the Companies Involved

Bharat Forge Limited (BFL) is a leading global provider of forged and machined components, serving critical sectors including automotive, railways, defence, aerospace, marine, construction, mining, and oil & gas. Headquartered in Pune, India, BFL has established itself as a key player in both domestic and international markets, specializing in metal forging technologies and the manufacture of high-strength, performance-oriented components.

A significant aspect of BFL's ownership structure is the involvement of the BNK Family, which holds a controlling stake through BF Investments Ltd. The BNK Family also has substantial interests in two joint ventures with Meritor Heavy Vehicle Systems, LLC—Meritor HVS (India) Limited (MHVSIL) and Automotive Axles Limited (AAL). It's worth noting that Meritor was acquired by Cummins Inc. in 2022, which may have strategic implications for the Indian joint ventures.

AAM India Manufacturing Corporation Private Limited (AAMCPL), on the other hand, is primarily engaged in the manufacturing and sale of axles for commercial vehicles in India. A wholly owned subsidiary of American Axle & Manufacturing Holdings Inc. (AAM Holdco), AAMCPL has a footprint that supports key OEMs in the Indian automotive space.

Structure of the Proposed Combination

The acquisition process involves a multi-stage restructuring and asset reallocation prior to Bharat Forge’s acquisition of AAMCPL:

1. Hive-Off Operations:

   • AAMCPL will first divest its ‘Pune Business Office’, which provides captive IT support and product engineering services.

   • The components business division, responsible for purchasing and exporting vehicle components as pass-through sales, will also be transferred to affiliates of AAM Holdco.

2. Integration of E-Axle Assets:

   • E-axle assembly lines currently held by AAM Auto Component (India) Private Limited—another Indian subsidiary of AAM Holdco—will be transferred to AAMCPL, making them part of the assets to be acquired.

Following these preliminary transactions, Bharat Forge will proceed to acquire the restructured AAMCPL in full.

CCI's Review and Approval

The Competition Commission conducted a thorough assessment of the competitive dynamics in the automotive components market, particularly in relation to axles and sub-components, where overlaps between the entities exist. After evaluating the potential implications of the deal on market competition and consumer interest, the CCI granted its approval—conditional on the adoption of specific voluntary remedies proposed by the companies.

While the exact details of these modifications remain confidential, such remedies typically include safeguards to mitigate anti-competitive risks, ensure fair market access, or address vertical integration concerns.

Implications for the Indian Automotive and Component Sector

This acquisition marks a significant consolidation move in the Indian commercial vehicle components market. With BFL gaining full control over AAMCPL’s axle manufacturing assets—augmented by the addition of e-axle capabilities—the company is likely to enhance its technological capabilities and expand its product offerings in the growing electrified powertrain segment.

Furthermore, the deal allows Bharat Forge to diversify its revenue streams, strengthen its position in the electric vehicle ecosystem, and potentially improve cost efficiencies through synergies in production and supply chain networks.

 

Bharat Forge's strategic acquisition of AAMCPL, now cleared by the CCI, marks a pivotal moment for the Indian automotive component industry. As the company integrates new capabilities and prepares for a future that emphasizes electrification and advanced mobility solutions, this move could shape industry dynamics and competition in the years to come.