On a spree to expand its base and boost the ever-increasing demand for high-end bicycles, world's largest bicycle manufacturer Hero Cycles is set to acquire a Sri Lankan bicycle manufacturing company.

Sources said all the formalities were almost complete and an official announcement would be made as soon as the chairman-cum-managing director (CMD) of Hero Cycles Pankaj Munjal visits Sri Lanka to seal the deal. Through this acquisition, the group is eyeing to expand its existing network in Sri Lanka. At the same time, it would have easier access to the economies within close proximity of the island nation.

Hero Cycles had acquired Delhi-based Firefox Bikes Pvt Ltd, which deals in high-end bicycles, in September.

Though top officials in Hero Cycles are tight-lipped about the name of the Sri Lankan company and the size of the deal, sources said the company was among the top manufacturers of cycles in Sri Lanka and deals in high-end cycles too.

Sources added that after unsuccessfully bidding for the German bicycle manufacturer MIFA last year, Hero now plans to enter Europe by establishing an assembly plant in Poland. The company is also in talks with another German bicycle brand for a probable takeover soon. With an annual turnover of close to Rs 2,000 crore and manufacturing capacity of 18,500 cycles daily, it will be a shot in its arm if these deals go through as the company will easily be able to acquire a significant share of cycle sales in mainland Europe, which includes countries like the UK and Germany.

The Times of India