Indian conglomerate Tata, a former partner of MG Rover, has bought the Aim-listed British engineering and design services company Incat Technologies for about £53.4 million.
Tata, which is doing the deal through its US-based Tata Technologies subsidiary, has offered 220p cash per share for Bristol-based Incat.
The agreed offer represents a 72 per cent premium over Incat's November 2004 issue price of 128p, and four per cent over Wednesday's closing price of 2111/2p.
Incat specialises in product software, operates in nine countries and employs about 700 people.
Its 2,000-plus customers include Airbus, AugustaWestland, BAE Systems, Boeing, DaimlerChrysler, Ford and Honda.
Tata said the acquisition would give it greater scale and stronger positions in North America, Europe and Asia.
Tata, whose chairman, Ratan Tata, recently received an honorary doctorate from the University of Warwick, collaborated with MG Rover on the ill-fated CityRover car.
Based on the Tata Indica, the car was perceived as ill equipped and poorly built and failed to make an impact on the budget market it was aimed at.
The collaboration ended when MG Rover went into receivership in April, and Tata's latest project involves building what it claims will be the world's cheapest car for the Indian customer.
The so-called "people's car" will cost 1 Lakh (100,000 rupees, or £1,300). There are no plans to sell the car in Britain.
Tata, however, has a sizeable stake in the UK consumer market through its ownership of Tetley Tea which it bought five years ago for £271 million.