Mumbai: Mahindra & Mahindra (M&M) Monday said the acquisition of SML Isuzu will make it a significant fourth-ranked manufacturer in the more than 3.5-tonne truck and bus segment and boost its share in the 5-12 tonne bus category to 21%.
The deal will also accelerate Mahindra Trucks & Buses' entry into the electric bus segment thanks to SML Isuzu’s advances in electric vehicle development.
On Saturday, Mahindra announced it will buy a 58.96% stake in SML Isuzu at ₹650 per share totalling ₹555 crore. M&M will also launch a mandatory open offer for up to 26% from public shareholders.
The acquisition aligns with Mahindra's strategy of scaling businesses over the next five to 10 years, said Anish Shah, MD and CEO, Mahindra Group. "In the greater than 3.5 tonne CV space, we are currently number five with a 3% market share. We focus on excelling in specific areas before expanding, and now see strong potential here," Shah said.
Mahindra is targeting 10–12% market share in the segment within five years, backed by growth in the LCV and ILCV categories. SML Isuzu has a 16% share in the LCV bus segment, which combined with Mahindra's share increases the total to 21%.
“Combining Mahindra Trucks & Buses and SML Isuzu gives us a clear number four position in trucks and buses over 3.5 tonnes. We see significant opportunities across costs, platform synergies, aggregates, network, and suppliers,” said Rajesh Jejurikar, executive director, auto and farm business, M&M.
He said Mahindra does not plan to merge or rationalise the two entities immediately, and SML Isuzu vehicles will continue to be sold under the Swaraj Mazda brand.
SML Isuzu's shares hit the lower circuit on Monday, closing at Rs1,590.05 apiece. M&M shares closed at Rs 2,927.70 each, up 2.29%.
The deal will also accelerate Mahindra Trucks & Buses' entry into the electric bus segment thanks to SML Isuzu’s advances in electric vehicle development.
On Saturday, Mahindra announced it will buy a 58.96% stake in SML Isuzu at ₹650 per share totalling ₹555 crore. M&M will also launch a mandatory open offer for up to 26% from public shareholders.
The acquisition aligns with Mahindra's strategy of scaling businesses over the next five to 10 years, said Anish Shah, MD and CEO, Mahindra Group. "In the greater than 3.5 tonne CV space, we are currently number five with a 3% market share. We focus on excelling in specific areas before expanding, and now see strong potential here," Shah said.
Mahindra is targeting 10–12% market share in the segment within five years, backed by growth in the LCV and ILCV categories. SML Isuzu has a 16% share in the LCV bus segment, which combined with Mahindra's share increases the total to 21%.
“Combining Mahindra Trucks & Buses and SML Isuzu gives us a clear number four position in trucks and buses over 3.5 tonnes. We see significant opportunities across costs, platform synergies, aggregates, network, and suppliers,” said Rajesh Jejurikar, executive director, auto and farm business, M&M.
He said Mahindra does not plan to merge or rationalise the two entities immediately, and SML Isuzu vehicles will continue to be sold under the Swaraj Mazda brand.
SML Isuzu's shares hit the lower circuit on Monday, closing at Rs1,590.05 apiece. M&M shares closed at Rs 2,927.70 each, up 2.29%.
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