In a step appointed to reshape the commercial scene of India, Mahindra & Maahindra Ltd (M & M) announced that it will get a 58.96 % stake in SML ISUZU LTD (SML) for 555 rupees. The deal, which amounted to 650 rupees per share, also includes a mandatory offer open under SEBI acquisition regulations.
The acquisition is a bold batch of Mahindra to support its presence in the commercial vehicles sector of 3.5 tons, as it currently has a 3 % stake in the market. By absorbing the SML business, Mahindra expects that its share will double to 6 %, with the aspirations reaching 10-12 % by 31 and 20 % or more by the 36 fiscal year.
SML ISUZU was founded in 1983, and it places a strong location in the bus and bus sector in India, especially in the intermediate bus sector for commercial cars (ILCV), where it has a 16 % stake. In FY24, SML was reported about 2,196 rupees and Ebitda with 179 rupees, supported by profitable operations, economical manufacturing, and strong engineering capabilities.
“The acquisition of SML ISUZU is an important teacher in seeing the Mahindra Group of 5x growth in our emerging business,” said Anish Shah, the group’s CEO and MD of the Mahindra Group. “This acquisition is in line with our capital customization strategy to invest in highly possible growth areas that have a strong right to win and show operating excellence.”
Under the deal, Maahindra will get a 43.96 % stake in Sumitomo Corporation and a 15 % separate share of ISUZU Motors Ltd. The move is expected to open a large symbol through costs, brand leverage, manufacturing effectiveness, and product portfolios.
“The SML brings a strong legacy, loyal customer base and reliable products wallet that complements the current Mahandra offers in the truck and bus sector,” said SML.
The deal is expected to be closed, pending the approval of the Competition Committee in India, within 2025. Kotak Investment Banking Mahindra recommends the financial aspects, while Kaitan & Co works as a legal advisor.
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