FountainVest calls off EuroGroup Laminations deal after govt approval fails | Company News

Chinese private equity firm FountainVest has canceled its deal to buy a major stake in EuroGroup Laminations (EGLA) from EMS, the Italian electric motor parts maker’s largest shareholder, after failing to get regulatory approval in India.

Ferrum, the investment vehicle owned by EMS Euro Management Services and FountainVest, said in a joint statement on Monday that compliance talks with Indian authorities failed and an alternative solution could not be found, so they canceled the deal.

EGLA shares could not start trading at the market open and it was stated that they would fall around 50 percent.

Last year, EMS agreed to sell its 45.7 percent stake in the electric motor parts supplier to FountainVest in a deal that envisioned a takeover offer aimed at delisting the Italian firm. This was subject to regulatory approvals in all relevant markets, including India.

The activities in India are related to EGLA’s 40 per cent stake in Kumar Precision Stampings acquired in 2024, analysts from Brokerage Equita said in a note.

They said that as part of compliance discussions, FountainVest and EMS proposed the break-up of EGLA’s Indian subsidiary.

Italy’s government had already approved the transaction, imposing unspecified conditions under so-called “golden power” rules aimed at protecting strategic assets, according to a document seen by Reuters in January.

EGLA said in a separate press release that the termination of the deal does not affect its industrial or financial outlook.

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