Mazagon Dock To Acquire Colombo Dockyard For Rs 450 Crore From Japanese Firm

Mazagon Dock Shipbuilders Ltd. on Friday announced the acquisition of Sri Lanka-listed Colombo Dockyard PLC for $52.96 million or Rs 452 crore from Japan's Onomichi Dockyard Co.

The MDL board approved the purchase of shares through a combination of primary subscription and secondary acquisitions from Onomichi Dockyard, a majority shareholder of CDPLC, according to a stock exchange filing.

After the acquisition of a 51% equity stake, CDPLC will become a subsidiary of Mazagon Dock.

Mumbai-based Mazagon Dock said the acquisition will enable it to strengthen its position in the ship repair and shipbuilding industry, "by unlocking operational synergies, enhancing research and development capabilities, and expanding market reach".

"It supports the company’s long-term growth vision in the shipbuilding and ship repair industry," the filing said.

Colombo Dockyard is listed on the Colombo Stock Exchange and is engaged in the business of shipbuilding and ship repair. The company was incorporated in 1974.

The dock is strategically located in the Indian Ocean on a key waterway that connects shipping lanes in the Arabian Sea to the Bay of Bengal and further east.

The company services 200 ships annually and is capable of handling any type of vessel up to 1.25 lakh deadweight tonnage, as per its website.

Onomichi acquired a majority stake in the company in 1993 from the government of Sri Lanka. As per a news report from December 2024, the Japanese owner planned to divest its holding as Colombo Dockyard was facing deepening financial challenges and competition in the international market.

The minority shareholders include Sri Lanka's provident fund, largest insurance company, and government-owned Sri Lanka Ports Authority.

Mazagon Dock share price closed 2.16% higher at Rs 3,189.3 apiece, after the announcement, compared to a 0.36% advance in the benchmark BSE Sensex. The stock has risen 43% so far this year.