Source Credit : Portfolio Prints
Mahindra & Mahindra Ltd. (M&M) said it has entered into an agreement to acquire 58.96% stake in SML Isuzu Ltd. (SML) at ₹650 per share, which is an outlay of ₹555 crore.
In addition, M&M will make an open offer as per SEBI norms to acquire additional upto 26% shares in the company.
“The proposed acquisition is a step towards establishing a strong presence in the 3.5T CV segment, where M&M has a 3% market share today, as compared to a 52% market share in the 3.5T LCV segment,” M&M said in a statement.
This acquisition will double the market share of the company in the truck and bus segment to 6%, with a plan to increase this to 10 - 12% by FY31 and over 20% by FY36, it said. As part of the transaction, M&M would acquire the entire stake of 43.96% held by Sumitomo Corporation, promoter of SML, and separately also acquire 15% stake held by Isuzu Motors Ltd., public shareholder of SML, for an aggregate consideration of ₹555 crore.
Anish Shah, Group CEO & MD, Mahindra Group, said, “The acquisition of SML Isuzu marks a significant milestone in Mahindra Group’s vision of delivering 5x growth in our emerging businesses.”
“This acquisition is aligned with our capital allocation strategy for investing in high potential growth areas which have a strong right to win and have demonstrated operational excellence,” he added. Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, M&M said, “SML brings a strong legacy, a loyal customer base, and a credible product portfolio that complements Mahindra’s existing offerings in the trucks and buses segment.”
“This acquisition is a pivotal step toward our ambition to become a full-range, formidable player in commercial vehicles by enhancing market coverage, unlocking operating leverage through platform consolidation, a unified supplier and network base, and better plant utilization. Together, we are well-positioned to scale rapidly and drive profitable growth,” he added.
The transaction is expected to complete within 2025.
