Acquiring companies is more logical than forming joint ventures, says Motherson’s VC Sehgal

Samvardhana Motherson International Ltd (SAMIL) is heading towards its next phase of expansion strategy, which involves acquisitions rather than joint ventures. The group’s Chairman, VC Sehgal, believes that owning companies offers greater flexibility and long-term strategic control compared to entering into joint ventures or building things from scratch.

Sehgal emphasized the importance of acquisitions during a recent discussion with analysts following the company’s Q4 FY25 results. He expressed his preference for acquisitions, stating, “Personally, I think that this makes more sense than a joint venture or trying to reinvent the wheel ourselves.”

The auto components major has completed 23 acquisitions in the current five-year cycle and views M&A as a more efficient way to expand capabilities, cater to customer needs, and enter new product verticals without having to build them from the ground up.

“When you own a company, you have the complete freedom to expand anywhere, in any country, based on your vision without having to seek external approvals,” explained Sehgal.

One of the key principles that the group follows when it comes to acquisitions is ensuring that each acquisition is directly supported by customer demand or necessity. Sehgal stressed the importance of customer alignment, stating, “You have to make sure that a customer is standing behind asking for that particular acquisition. If it’s only that you feel that’s a good business, well, I’d rather that I have a customer telling me that he needs that product.”

This customer-aligned approach has led to 48 successful acquisitions within the group. These acquisitions not only ensure faster integration but also provide clearer revenue visibility and operational synergies.

Looking ahead to its Vision 2030, where the Motherson group aims to achieve $108 billion in gross revenues, the company is actively evaluating potential acquisition opportunities across various verticals. Sehgal mentioned that the group is particularly interested in areas where supply chain gaps exist or where OEMs require an experienced partner.

Despite closing FY25 with record revenues of Rs 1.13 lakh crore and a lifetime order book of $88 billion, SAMIL continues its expansion into non-auto sectors such as aerospace, consumer electronics, and semiconductors. Sehgal highlighted the catalytic role of M&A in these areas and reiterated the group’s commitment to acquisitions as a means of ensuring customer satisfaction, team growth, and overall group success.