In a strategic move to bolster its position in the commercial vehicle market, Mahindra & Mahindra (M&M) announced on April 26 that it has finalized a deal to acquire a 58.96% stake in SML Isuzu Ltd. The transaction is valued at ₹555 crore, with shares priced at ₹650 each. Following the guidelines set by SEBI, M&M plans to initiate an open offer to further enhance its stake in the company.
Details of the Acquisition
As part of this significant acquisition, M&M will purchase:
- 43.96% of shares held by Sumitomo Corporation, a key promoter of SML Isuzu.
- An additional 15% stake owned by Isuzu Motors Ltd., a public shareholder.
M&M has emphasized that this acquisition aligns with its strategic vision to achieve fivefold growth in emerging business sectors.
A Vision for Growth
Anish Shah, the CEO and Managing Director of Mahindra Group, expressed that the acquisition of SML Isuzu is a crucial milestone in realizing the group’s ambitious goals. He stated, “This investment reflects our commitment to capital allocation in high-potential growth areas that showcase operational excellence and competitive advantage.”
Enhancing Market Presence
Rajesh Jejurikar, M&M’s Executive Director and CEO for Auto and Farm Sector, highlighted that SML Isuzu brings a rich legacy and a dedicated customer base, which will complement Mahindra’s existing truck and bus offerings. He noted, “This acquisition is a pivotal step towards becoming a comprehensive player in the commercial vehicle sector, allowing us to improve market coverage and operational efficiency.”
Looking Ahead
The completion of this transaction, including the open offer, awaits approval from the Competition Commission of India and is anticipated to finalize by 2025 in accordance with SEBI regulations.
Founded in 1983, SML Isuzu has established a reputable presence within the truck and bus industry, making this acquisition a promising venture for Mahindra & Mahindra as they strive to enhance their foothold in a competitive market.
For more insights on M&M’s strategic developments and updates in the automotive industry, stay tuned!
