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 signed an agreement to acquire a 58.96% stake in heavy vehicle maker SML Isuzu for ₹555 crore. The acquisition is expected to have a positive impact on M&M’s commercial vehicle business, with the company planning to increase its market share in the segment to 10-12% by FY2031 and 20% by FY2036.
The agreement was signed between M&M and SML Isuzu’s majority shareholder, SML Group, which will receive ₹555 crore for its stake in the company. The acquisition will be done through an open offer, which is expected to be completed by the end of March 2023.
SML Isuzu is a leading player in the commercial vehicle industry, with a strong presence in the bus and truck market. The company has a wide range of products, including buses, trucks, and special purpose vehicles, which are popular among fleet operators and individual customers. With this acquisition, M&M will be able to leverage SML Isuzu’s expertise and market presence to expand its commercial vehicle business.
The acquisition is seen as a strategic move by M&M to increase its presence in the commercial vehicle market. The company has been focusing on expanding its business in this segment, and the acquisition of SML Isuzu will help it to achieve this goal. M&M has been facing stiff competition in the commercial vehicle market, and the acquisition of SML Isuzu will help it to gain a competitive edge.
The acquisition is also expected to have a positive impact on SML Isuzu’s business. The company has been facing financial challenges in recent years, and the acquisition will provide it with the necessary resources to scale up its business. SML Isuzu will continue to operate independently, and its management team will remain unchanged.
The acquisition is subject to regulatory approvals, and the parties involved are expected to complete the deal by the end of March 2023. The open offer will be launched shortly, and shareholders of SML Isuzu will be able to tender their shares at a price of ₹460 per share.
The impact of the acquisition on M&M’s share price is expected to be positive. The company’s shares have been under pressure in recent months due to concerns over its commercial vehicle business. However, the acquisition of SML Isuzu is expected to provide a boost to the company’s shares, and analysts are forecasting a significant increase in the stock price.
In conclusion, the acquisition of SML Isuzu by M&M is a significant development in the commercial vehicle industry. The acquisition will help M&M to strengthen its bus and truck business, and increase its market share in the segment. The acquisition is expected to have a positive impact on SML Isuzu’s business, and the company will continue to operate independently. The deal is subject to regulatory approvals, and the parties involved are expected to complete the deal by the end of March 2023.
