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Turkish defense manufacturer Otokar has signed an agreement to acquire its Romanian partner Automecanica, aiming to expand its production footprint in Europe and support armored vehicle production for Romania.
Founded around 85 years ago, Automecanica initially focused on aircraft maintenance and parts production.
The company has since expanded its portfolio to include vehicle manufacturing, maintenance and repair services, special trailers and semi-trailers, electric city buses, containers, vehicle bodies and specialized chassis.
Otokar said Wednesday the acquisition would allow it to transform Automecanica into a European production hub. The Romanian firm is Otokar’s local production partner for an armored vehicle tender in Romania.
The deal follows an agreement outlining the main principles of a share purchase, under which Otokar plans to acquire 96.77% of Automecanica’s capital. The value of the shares is estimated at about $101.7 million, with the final amount to be determined at closing after adjustments related to net debt and working capital.
The transaction is expected to close by the end of April, subject to a detailed review of Automecanica, the signing of a share transfer agreement, and approvals from Romania’s competition and national defense authorities.
Otokar is continuing production and delivery of Cobra II vehicles under an €857 million contract awarded by Romtechnica, a company owned by Romania’s National Defense Ministry. The contract covers 1,059 units of the four-by-four tactical armored vehicle.
As part of the project, 781 vehicles have already been produced in Romania.
Otokar said it plans to fulfill its obligations under the tender through the joint venture established with Automecanica.
Automecanica holds a 50% stake in Sisteme Aparare Romania (SAROM), a joint venture formed with Otokar’s Romanian subsidiary, Otokar Land Systems SRL.
The SAROM joint venture will manufacture, market and provide service support for Otokar’s Cobra II vehicles in Romania.
Otokar said it may transfer its obligations under the agreement to its wholly owned subsidiary, Otokar Land Systems SRL.
Automecanica has existing infrastructure, production facilities and operating licenses in Romania, which are expected to support expanded manufacturing activities.
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