Auto maker Mahindra & Mahindra has entered the aerospace market with acquisition of two Australian aircraft component manufacturing companies.
Mahindra has acquired majority stakes in Aerostaff Australia (AA) and Gippsland Aeronautics (GA) for a total commitment of approximately Rs 175 crore, jointly with Kotak Private Equity.
The Mahindras will hold 75 per cent in each of the companies, which will enable the Indian engineering group with interests in software to make small aircraft.
The tie-up will enable the company make 2-20 seater, turboprop aircraft, said to be the fastest growing aircraft segments in general aviation.
A plant is being set up in Bangalore to complement these acquisitions, company officials said here.
Mahindra will retain the existing managements of GA and AA. Anand Mahindra, Vice Chairman and Managing Director, Mahindra Group, said, “M&M’s move into the Aerospace segment is deliberate, bold and timely, and is supported by a renewed demand for economical air transportation around the world. Our investment in component capability addresses the growing needs of both the civil and defence markets.”
AA is a manufacturer of aircraft components and assemblies for large aerospace OEMs (other equipment manufacturer). AA’s acquisition will help catapult M&M into the burgeoning Defence Offset and Commercial Aviation market.
GA is an established brand in general aviation and has delivered more than 200 FAR 23 certified planes in 32 countries.
The aerospace deals mark a new high in the evolution of the Mahindra group, which, besides having a recent high-profile entry into passenger cars, was also in the news this year as its software arm Tech Mahindra entered as a white knight to rescue Satyam Computer Services, the country’s fourth largest information technology exporter, from a corporate fraud.