M&M to Acquire 58.96% Stake in SML Isuzu for ₹555 Crore
Mahindra & Mahindra (M&M), one of India’s leading automakers, has made a significant move in the commercial vehicle sector by announcing its intention to acquire a 58.96% stake in SML Isuzu, a renowned heavy vehicle maker. The acquisition, valued at ₹555 crore, aims to strengthen M&M’s bus and truck business, thereby enhancing its market share in the commercial vehicle segment.
According to the agreement, M&M will acquire the stake in SML Isuzu through an open offer, which will be launched soon. The open offer will be made to the public, including institutional investors, and retail shareholders of SML Isuzu. The acquisition is expected to be completed by the end of this fiscal year.
The acquisition of SML Isuzu is a strategic move by M&M to increase its presence in the commercial vehicle market. The company plans to leverage SML Isuzu’s expertise in manufacturing heavy vehicles, such as buses and trucks, to expand its product portfolio and customer base.
“M&M’s acquisition of SML Isuzu is a significant step towards strengthening our presence in the commercial vehicle market,” said Dr. Pawan Goenka, Managing Director, M&M. “We believe that this acquisition will not only enhance our market share but also provide our customers with a wider range of products and services.”
With this acquisition, M&M aims to increase its market share in the commercial vehicle segment to 10% to 12% by FY2031 and to 20% by FY2036. The company believes that the acquisition will also provide it with an opportunity to leverage SML Isuzu’s strong distribution network and service infrastructure.
SML Isuzu, which was founded in 1984, is a leading manufacturer of heavy vehicles, including buses and trucks. The company has a strong presence in the Indian market and exports its products to various countries, including the Middle East, Africa, and Southeast Asia.
The acquisition of SML Isuzu is expected to be a win-win deal for both companies. For M&M, it will provide an opportunity to expand its presence in the commercial vehicle market, while for SML Isuzu, it will provide access to M&M’s resources, expertise, and global network.
The open offer price for the acquisition has been set at ₹1,155 per equity share, which is 12.5% higher than the average stock price of SML Isuzu over the past 26 weeks. The open offer will be launched soon, and the acquisition is expected to be completed by the end of this fiscal year.
The impact of the acquisition on M&M’s share price is expected to be positive. The company’s stock price has been trading in the range of ₹800 to ₹1,000 per share in recent times, and the acquisition is expected to provide a boost to the stock.
In conclusion, the acquisition of SML Isuzu by M&M is a significant move in the commercial vehicle sector. The acquisition is expected to strengthen M&M’s presence in the bus and truck business and provide it with an opportunity to expand its product portfolio and customer base. The open offer price has been set at ₹1,155 per equity share, and the acquisition is expected to be completed by the end of this fiscal year.
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