India's Hinduja Group eyes stake in Valeo - report

MUMBAI, March 31 (Reuters) - India's Hinduja Group is in talks to buy a controlling stake in French auto parts maker Valeo (VLOF.PA) in a deal that is expected to be worth about $1.5 billion, the Business Standard said on Monday, citing a source.

Executives from Hinduja, which controls India's No. 2 bus and truck maker, Ashok Leyland Ltd (ASOK.BO), met the top team at Valeo in Paris last week, the paper cited a source familiar with the development as saying.

"The deal will provide immense synergy for Ashok Leyland and Ennore Foundries,", the paper cited the source as saying.

Ennore Foundries ENOR.BO, now named Hinduja Foundries Ltd, makes auto parts.

A spokesman for the Hinduja Group said the report was "speculative".

Valeo, Europe's third-biggest car parts maker, has said it plans to divest assets with about 2 billion euros ($3.2 billion) in sales by the end of 2008, including the sale of its wiring harness unit last year, and acquire new assets on the same scale. ($1=.6330 Euro) (Reporting by Rina Chandran; Editing by John Mair)