Eicher denies Daimler stake sale report

MUMBAI (Reuters) - Truck maker Eicher Motors Ltd. has no plans to sell a further stake in the company to DaimlerChrysler AG, but has been approached by some global truck makers, a top official said on Friday.

Eicher Chief Executive A. Ramasubramanian's comments came after The Economic Times, an Indian daily, reported that Daimler was likely to buy shares from Eicher's founders to raise its holding to 24 percent from 3.6 percent, quoting market sources.

Eicher's founders own 58.6 percent of the Indian firm.

"To my knowledge there is no such thing at the moment," Ramasubramanian told Reuters. "About tomorrow, I can't say anything."

The newspaper added that Daimler would also make an open offer to public shareholders for an additional 20 percent in a bid to meet Indian market regulations.

Any firm which acquires 15 percent or more in an Indian company is required by the market regulator to make an open offer for a further holding of 20 percent.

Eicher was not "actively seeking" any partner, though some global truck makers had approached it, Ramasubramanian said, without naming them.

A spokeswoman for DaimlerChrysler's truck division said "we are continuing our talks with different partners."

Daimler's truck chief said in August the company was holding talks with India's top truck and bus maker, Tata Motors Ltd., and Eicher to expand current capital links and co-operation.

Daimler sells its flagship Mercedes-Benz range, super luxury Maybach cars, and the Actros range of trucks in India. It already holds 6.7 percent of Tata Motors.

Commentators see a larger role for overseas companies in the Indian market.

"There is no other alternative for Eicher but to align with a global firm. They need the technology," said Arvind Jain, an analyst with Religare.

Larger trucks were now needed in India as road networks have improved, Jain said, adding that Eicher could turn into a sourcing base for Daimler and offer its Indian distribution network to the global truck maker.

In India, other large-vehicle makers have completed tie-ups with overseas firms.

Force Motors Ltd. has a joint venture with Germany's MAN AG, while Swaraj Mazda has a technical pact with Japan's Isuzu Motors Ltd.

Indian papers have reported Volvo is close to buying a large stake in India's second-largest truck and bus maker, Ashok Leyland Ltd.

Eicher shares closed slightly up in a flat Mumbai market.

(Additional reporting by Hendrik Sackmann in Stuttgart)