Concentric AB announced yesterday the restructuring plans for their new facility Civilcoy, Argentina through an acquisition of GKN Sinter Metals de Argentina SA, as demands weaken in the South American commercial vehicle market.
The acquisition of the two companies was completed earlier this year, when Concentric gained important leverage in the Mercosur trade union, which will help in its success in the Argentinian market. Unfortunately, the program will result in a reduction of 34 employees that were engaged at the date of acquisition.
Part of the headcount reduction has already been delivered and the remaining will be delivered in July 2015 through a mix of voluntary and compulsory redundancies. According to Digital Journal’s 2015 first quarter interim report, Concentric has gained MSEK 15 from income arising in the negative goodwill as fair value exceeded its purchase price. This, together with the apparent over manning in the Chivilcoy facility at the date of acquisition, enabled Concentric to agree a favorable purchase price.
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