M&M to Acquire 58.96% Stake in SML Isuzu for ₹555 Crore
In a significant move to strengthen its bus and truck business, 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 expected to positively impact M&M’s commercial vehicle business, which has been growing steadily in recent years.
As per the agreement, M&M will make an open offer to the public to acquire the remaining 41.04% stake in SML Isuzu. The open offer price for the public shareholding will be announced soon, and the timeline for the acquisition will be disclosed separately.
The acquisition is expected to strengthen M&M’s position in the commercial vehicle market, which has been a key focus area for the company in recent years. M&M has been working to increase its market share in the commercial vehicles segment, and this acquisition is expected to help the company achieve its goals.
According to M&M’s plans, the company aims to increase its market share in the commercial vehicles segment between 10% and 12% by FY2031 and to 20% by FY2036. The acquisition of SML Isuzu is expected to be a significant step towards achieving this goal.
SML Isuzu is a well-known player in the heavy vehicle market, with a strong presence in the bus and truck segment. The company has a diverse product range, including buses, trucks, and construction equipment, which will complement M&M’s existing portfolio.
The acquisition is also expected to bring in new technologies and capabilities to M&M’s commercial vehicle business. SML Isuzu has a strong R&D focus and has been investing heavily in new technologies, including electric and hybrid vehicles. M&M plans to leverage these technologies to develop new products and expand its presence in the commercial vehicle market.
In addition to strengthening M&M’s commercial vehicle business, the acquisition is also expected to create new opportunities for growth and job creation. The company plans to invest in the SML Isuzu facility in Punjab and create new employment opportunities in the region.
The acquisition is subject to regulatory approvals, including approvals from the National Company Law Tribunal (NCLT) and the Competition Commission of India (CCI). M&M has already received approval from the Securities and Exchange Board of India (SEBI) for the open offer.
The news of the acquisition has sent M&M’s shares soaring, with the company’s stock price rising by over 4% on the announcement. The acquisition is expected to be completed by the end of March 2023, subject to regulatory approvals.
In conclusion, the acquisition of SML Isuzu by M&M is a significant development in the Indian commercial vehicle market. The acquisition is expected to strengthen M&M’s position in the market, bring in new technologies and capabilities, and create new opportunities for growth and job creation. As M&M continues to execute its plans to increase its market share in the commercial vehicles segment, this acquisition is likely to play a key role in achieving its goals.
