Automotive Axles Limited has announced that it has entered into a binding Memorandum of Understanding (MoU) with Meritor HVS (India) Limited (MHVSIL) to restructure their business operations. The decision was taken at the company’s board meeting on March 20, 2025, as per the regulatory disclosure.
Under the new arrangement, specific customers of MHVSIL, who have been sourcing products through Meritor, will now be directly serviced by Automotive Axles. The move comes after shareholders rejected material related party transactions between the two entities, prompting a strategic realignment to ensure continuity of supply.
According to the MoU, the company will take over the direct servicing of OEM customers that were previously managed under a long-standing supply agreement with MHVSIL dating back to 1999. While the product specifications, pricing, and service terms will remain unchanged, the realignment will allow Automotive Axles to strengthen its direct customer relationships and enhance operational efficiency.
Additionally, Automotive Axles and MHVSIL are set to enter into a services agreement, where MHVSIL will provide support in areas such as marketing, business development, engineering, and product development. This collaboration aims to maintain seamless operations and reinforce their business synergies despite the shift in customer management.
MHVSIL, a part of the promoter group, currently holds no direct stake in Automotive Axles. However, as the transaction qualifies as a related-party agreement, it has been executed on an arm’s length basis, ensuring compliance with regulatory requirements.
The realignment underscores Automotive Axles’ commitment to optimizing its business structure while maintaining stable and efficient customer service. Further details regarding the agreement, including the final execution of customer transfers, will be announced in due course.
