M&M to Acquire 58.96% Stake in SML Isuzu for ₹555 Crore
In a bid to strengthen its bus and truck business, Mahindra & Mahindra (M&M) has signed an agreement to acquire a 58.96% stake in heavy vehicle maker SML Isuzu for ₹555 crore. The acquisition is expected to give M&M a significant foothold in the commercial vehicle market and help the company increase its market share in the segment.
According to a report by CNBC-TV18, M&M will acquire the stake through an open offer, which is expected to be completed by the end of June 2023. The report added that the acquisition is subject to regulatory approvals and other customary conditions.
The acquisition is part of M&M’s strategy to expand its presence in the commercial vehicle market, which has been growing steadily in recent years. The company plans to increase its market share in the commercial vehicles segment to 10% to 12% by FY2031 and to 20% by FY2036.
SML Isuzu, which was formerly known as Swaraj Mazda Limited, is a well-established player in the heavy vehicle market, with a strong presence in the bus and truck segments. The company has a wide range of products, including buses, trucks, and spare parts, and has a strong distribution network across the country.
The acquisition is expected to give M&M access to SML Isuzu’s existing customer base and distribution network, which will help the company to expand its presence in the commercial vehicle market. It will also give M&M an opportunity to leverage SML Isuzu’s expertise and technology to develop new products and services.
M&M’s decision to acquire SML Isuzu comes at a time when the commercial vehicle market is experiencing rapid growth, driven by increasing demand for goods transportation and urbanization. The market is expected to continue growing in the coming years, driven by factors such as infrastructure development, economic growth, and increasing demand for e-commerce services.
The acquisition is also expected to give M&M a competitive edge in the market, as it will give the company access to SML Isuzu’s existing products and technology. This will enable M&M to offer a wider range of products and services to its customers, which will help the company to increase its market share and revenue.
In addition to the acquisition, M&M also plans to invest in SML Isuzu’s manufacturing facilities and distribution network to improve efficiency and productivity. The company also plans to leverage SML Isuzu’s expertise in design and engineering to develop new products and services.
The acquisition is expected to have a positive impact on M&M’s financial performance, as it will give the company access to SML Isuzu’s existing cash flows and profitability. The acquisition is also expected to create synergies and cost savings, which will help M&M to improve its profitability and returns on investment.
In conclusion, M&M’s acquisition of a 58.96% stake in SML Isuzu for ₹555 crore is a strategic move that is expected to strengthen its bus and truck business and give the company a competitive edge in the commercial vehicle market. The acquisition is expected to give M&M access to SML Isuzu’s existing customer base and distribution network, and leverage its expertise and technology to develop new products and services.
