Published by Global Banking & Finance Review®
Posted on February 16, 2026
2 min readLast updated: February 16, 2026
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FountainVest and EMS have canceled their EuroGroup Laminations stake deal due to compliance issues in India, leaving EuroGroup's outlook unchanged.
Feb 16 (Reuters) - Chinese private equity firm FountainVest has called off a deal to buy a major stake in EuroGroup Laminations (EGLA) from the Italian electric motor parts maker's top shareholder EMS after they failed to obtain a regulatory approval in India.
EMS Euro Management Services and FountainVest-owned investment vehicle Ferrum said in a joint statement on Monday that compliance discussions with Indian authorities had been unsuccessful and an alternative solution could not be found, so they had scrapped the deal.
Shares of EGLA failed to start trading at market open, and were indicated to fall around 50%.
EMS last year agreed to sell its 45.7% stake in the electric motor components supplier to FountainVest in a deal that envisaged a buyout offer aimed at delisting the Italian firm. It was contingent on regulatory approvals in all relevant markets, including India.
The activities in India relate to EGLA's 40% stake in Kumar Precision Stampings, purchased in 2024, analysts from brokerage Equita said in a note.
As part of the compliance talks, FountainVest and EMS had proposed carving out EGLA's Indian subsidiary, they said.
Italy's government had already cleared the transaction by imposing unspecified conditions under the so-called "golden power" rules aimed at shielding strategic assets, according to a document seen by Reuters in January.
EGLA said in a separate press release that the deal termination did not affect its industrial or financial outlook.
(Reporting by Enrico Sciacovelli, Mirko Miorelli in Gdansk, editing by Milla Nissi-Prussak)
Compliance refers to the process of ensuring that a company adheres to laws, regulations, and internal policies. It is crucial for maintaining legal and ethical standards in business operations.
Equity represents ownership in a company, typically in the form of stocks or shares. It signifies the value of an owner's interest after all liabilities have been deducted.
An investment is an asset or item acquired with the goal of generating income or appreciation. It can include stocks, bonds, real estate, or other financial instruments.
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