M&M to Acquire 58.96% Stake in SML Isuzu for ₹555 Crore
In a significant development, Mahindra & Mahindra (M&M) has announced that it has signed an agreement to acquire a 58.96% stake in heavy vehicle maker SML Isuzu for ₹555 crore. The acquisition is aimed at strengthening M&M’s bus and truck business, and the company plans to increase its market share in the commercial vehicles segment in the coming years.
As per the agreement, M&M will make an open offer to the public and institutional shareholders of SML Isuzu to acquire the remaining outstanding shares of the company. The open offer price has been fixed at ₹2,400 per share, which is at a premium of 21.9% to the current market price of SML Isuzu.
The acquisition is expected to have a significant impact on the commercial vehicle market in India. With its strengthened presence in the segment, M&M plans to increase its market share in the commercial vehicles segment between 10% and 12% by FY2031 and to 20% by FY2036. The company believes that the acquisition will provide it with the necessary scale and resources to compete effectively in the market.
SML Isuzu is a leading player in the Indian commercial vehicle market, with a strong presence in the bus and truck segment. The company has a wide range of products, including buses, trucks, and SUVs, and has a strong distribution network across the country.
M&M’s acquisition of SML Isuzu is expected to provide several benefits to the company. Firstly, it will provide M&M with a stronger presence in the commercial vehicle market, which will enable it to increase its market share and revenue. Secondly, the acquisition will provide M&M with access to SML Isuzu’s distribution network and manufacturing capacity, which will enable it to expand its product offerings and reach a wider customer base.
Furthermore, the acquisition is expected to provide M&M with the necessary resources to invest in research and development, which will enable it to develop new and innovative products that meet the evolving needs of its customers. The company plans to use the resources generated from the acquisition to invest in the development of electric and autonomous vehicles, which are expected to play a key role in the future of the commercial vehicle industry.
The acquisition is also expected to provide several benefits to SML Isuzu’s shareholders. The open offer price of ₹2,400 per share represents a premium of 21.9% to the current market price of SML Isuzu, which is expected to attract a significant number of shareholders to participate in the open offer. The acquisition will also provide SML Isuzu’s shareholders with the opportunity to exit their investments at a higher price than the current market price.
In conclusion, M&M’s acquisition of SML Isuzu is a significant development in the Indian commercial vehicle market. The acquisition is expected to provide M&M with a stronger presence in the market, access to SML Isuzu’s distribution network and manufacturing capacity, and the necessary resources to invest in research and development. The acquisition is also expected to provide several benefits to SML Isuzu’s shareholders, including the opportunity to exit their investments at a higher price than the current market price.
