Mahindra & Mahindra Ltd (M&M) signed an agreement to acquire 58.96 percent participation in SML Isuzu Ltd. (SML) to RS 650 per action, which is a disbursement of RS 555 million rupees, according to a declaration of the automatic statement. In addition, M&M will make an open offer according to Sebi’s acquisition regulations.
The acquisition of proposal is a step to establish a strong presence in the 3.5T CV segment, where M&M has a market share of 3 percent today, compared to a market share of 52 percent in the 3.5T LCV segment.
Dr. Anish Shah, CEO and MD of the Mahindra Group Group said: “The acquisition of SML isuzu marks a significant milestone in the vision of Mahindra Group to offer 5x growth in our emerging businesses. This acquisition is aligned with our capital assignment strategy to invest in areas of potential growth that have a strong right to win and have demonstrated operational excellence.”
The M&M trucks and bus division has made significant progress in recent years. This acquisition will double the market share to 6 percent, with a plan to increase this to 10 – 12 percent in fiscal year 31 and 20 percent+ for fiscal year 36.
Incorporated in 1983, SML ISUZU is a company quoted with well-recognized brands, a strong vintage presence and PAN-India in the truck and bus segment.
SML has a leading market position in the ILCV bus segment, with a market share of around 16 percent, says the company.
The company reported operational income of RS 2,196 million rupees and EBITDA or RS 179 million rupees in fiscal year 2014. It has profitable operations, frugal manufacture and strong engineering capabilities.
As part of the transaction, M&M would acquire all the participation or 43.96 percent in the possession of Sumitomo Corporation, promoter of SML and separately would also acquire a 15 percent participation in the possession of Isuzu Motors Ltd, SML public shareholder. For aggete. For aggete.
M&M would also launch a mandatory open sacrifice of up to 26 percent participation of eligible Public SML shareholders in accordance with Sebi’s acquisition regulations, the statement added.
Rajash Jejurikar, Executive Director and CEO, Sector of Automobiles and Farmers, Mahindra & Mahindra Ltd., said: “This acquisition is a fundamental step towards our ambition to become a formidable player and complete range in commercial vehicles by improving market coverage, unlocking the operational lever through the consolidation of the platform, a unified supplier and a unified provider of networks, and a better use of plant plants.
The transaction, including the open sacrifice, is subject to the approach of the Competition Commission of India and is expected to be completed within 2025 in accordance with Sebi’s acquisition regulations.
Kotak Investment Banking is acting as a financial advisor to M&M and open sacrifice manager. Khaitan & CO acted as M&M legal advisor, added the official statement.