Mahindra & Mahindra (M&M) announced on Saturday it will acquire a majority stake of 58.96% in commercial vehicle maker Isuzu Limited (SML) at Rs 555 crore.
M&M will buy 63.62 lakh shares of SML from Sumitomo Corporation, one of SML’s promoters, at Rs 650 per share, amounting to a total of Rs 413.55 crore. This makes up about 43.96% of SML’s complete shareholding, the company said in a stock exchange filing.
In addition, the Anand Mahindra-owned company will also acquire another 21.70 lakh shares, or 15% of SML’s equity, from Isuzu Motors. This deal is valued at around Rs 141.10 crore, also at Rs 650 per share.
"The proposed acquisition is a step towards establishing a strong presence in the >3.5T CV segment, where M&M has a 3% market share today, as compared to a 52% market share in the <3.5T LCV segment. M&M’s Trucks and Buses Division has made meaningful progress over the past few years. This acquisition will double the market share to 6%, with a plan to increase this to 10 - 12% by FY31 and 20%+ by FY36.," noted the automaker in the filing.
Dr. Anish Shah, Group CEO and MD of the Mahindra Group, said the acquisition is an important milestone for the company.
“The acquisition of SML Isuzu marks a significant milestone in the Mahindra Group’s vision of achieving 5x growth in our emerging businesses,” he said. “It fits perfectly with our capital allocation strategy, where we invest in high-potential areas that demonstrate strong performance and clear opportunities to win," he added.
Meanwhile, Rajesh Jejurikar, Executive Director and CEO of the Auto and Farm Sector at Mahindra & Mahindra, said the deal strengthens Mahindra’s position in the commercial vehicles market.
“This acquisition is a pivotal step toward our ambition of becoming a full-range, formidable player in the commercial vehicle segment. It will help us enhance market coverage, improve operating efficiency by consolidating platforms, unify supplier and dealer networks, and make better use of manufacturing capacity,” he added.
M&M will buy 63.62 lakh shares of SML from Sumitomo Corporation, one of SML’s promoters, at Rs 650 per share, amounting to a total of Rs 413.55 crore. This makes up about 43.96% of SML’s complete shareholding, the company said in a stock exchange filing.
In addition, the Anand Mahindra-owned company will also acquire another 21.70 lakh shares, or 15% of SML’s equity, from Isuzu Motors. This deal is valued at around Rs 141.10 crore, also at Rs 650 per share.
"The proposed acquisition is a step towards establishing a strong presence in the >3.5T CV segment, where M&M has a 3% market share today, as compared to a 52% market share in the <3.5T LCV segment. M&M’s Trucks and Buses Division has made meaningful progress over the past few years. This acquisition will double the market share to 6%, with a plan to increase this to 10 - 12% by FY31 and 20%+ by FY36.," noted the automaker in the filing.
Dr. Anish Shah, Group CEO and MD of the Mahindra Group, said the acquisition is an important milestone for the company.
“The acquisition of SML Isuzu marks a significant milestone in the Mahindra Group’s vision of achieving 5x growth in our emerging businesses,” he said. “It fits perfectly with our capital allocation strategy, where we invest in high-potential areas that demonstrate strong performance and clear opportunities to win," he added.
Meanwhile, Rajesh Jejurikar, Executive Director and CEO of the Auto and Farm Sector at Mahindra & Mahindra, said the deal strengthens Mahindra’s position in the commercial vehicles market.
“This acquisition is a pivotal step toward our ambition of becoming a full-range, formidable player in the commercial vehicle segment. It will help us enhance market coverage, improve operating efficiency by consolidating platforms, unify supplier and dealer networks, and make better use of manufacturing capacity,” he added.
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