The 600 million euros transaction will see VEL divesting its lighting System operations in the USA, Brazil, Mexico, Poland, Czech Republic, Germany, Turkey, and Morocco. The divestment is part of VEL's strategy to align its resources with the high value and high growth primary markets in China, India, and the two-wheeler sector globally.

VEL aims to transform itself into a high-tech company and focus on the existing growth of electronics, connectivity, electrical vehicles (EVs) product lines and the 2-wheeler segment globally.

VEL will continue to operate its China JV and other international 2-wheeler businesses in countries like Italy and Vietnam and global electronics businesses in Poland and Romania. The company is retaining its 4-wheeler lighting operations in Asia.

The planned divestment of Varroc's 4-wheeler lighting systems businesses in the Americas and Europe will ensure enhanced shareholders' value, sustainable growth, and further development of its R&D facilities and engineering capabilities.

Tarang Jain, chairman & managing director of Varroc Engineering said: "Our immediate goal is to be future-ready with continued profitable growth in emerging sectors like the EV and high technology electronics. The divestment of our passenger car lighting operations in the Americas and Europe will be a win-win deal for Varroc and Plastic Omnium. For us, we unlock great value for all our shareholders, employees, and business partners as we plan for our next level of growth in the fastest-growing economies and auto sectors in the world. We will also continue to invest in our teams and people as we embark on the next phase of our growth."

Varroc Engineering is a global tier-1 automotive component manufacturing organization. The organization designs, manufactures and supplies exterior lighting systems, plastic and polymer components, electricals-electronics components, and precision metallic components to passenger cars, commercial vehicles, two-wheelers, three-wheelers, and off-highway vehicle OEMs directly worldwide.

On a consolidated basis, VEL reported net loss of Rs 265.16 crore in Q3 December 2021 as against net loss of Rs 138.73 crore in Q3 December 2020. Net sales declined 10.24% to Rs 3134.95 crore in Q3 December 2021 over Q3 December 2020.

Shares of VEL was currently frozen at the 52-week high level.