Mahindra & Mahindra on Tuesday said it will acquire 70% stake in the ailing South Korean auto-maker Ssangyong Motor for $463 million (about Rs 2,105 crore) in order to become a global utility vehicle major. The acquisition process is expected to complete by March 2011.
As part of the agreement, out of the total cost of acquisition of $463 million, $378 million will be in new stocks and $85 million in corporate bonds.
“The coming together of Mahindra and Ssangyong will result in a competitive global UV player. Together with its financial capability, Mahindra offers competence in sourcing and marketing strategy while Ssangyong has strong capabilities in technology,” M&M president (automotive and farm equipment sectors) Pawan Goenka said.
In August this year, M&M had signed a pact to acquire Ssangyong after being chosen as the preferred bidder in a race, which had also included Kolkata-based Ruia group.
The deal will give M&M access to Ssangyong’s global distribution network. Ssangyong has 138 dealers in South Korea, and 1,300 dealers across 98 nations. It sold 35,000 units in 2009.
This is M&M’s second major takeover deal this year after buying a majority stake in Reva Electric Car Co.