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      Mahindra Buys Ssangyong, Plans Seven New Models

      Payal Pathak

      Payal Pathak

      Mahindra and Mahindra has inked the final buyout of 70 percent stake in South Korean automaker Ssangyong. It had emerged as a successful bidder for the company three months earlier when the South Korean government and federal courts chose M&M as the most promising buyer to salvage Ssangyong’s dying spirits
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      M&M will pay $463 million (about Rs.2,100 crore), split into an equity investment of $378 million, which will be used to repay the company’s debt, and the balance $85 million will be in the form of corporate bonds. In return, M&M gets a 70% stake in Ssangyong and a global automobile business with a product portfolio comprising a luxury sedan, four sport utility vehicles and one multipurpose vehicle.

      The deal gives Mahindra access to more-advanced engines and helps widen its dealer network in Asia and Europe amid rising competition in India. “The acquisition is a good strategic fit for Mahindra but the financial transaction wasn’t cheap,” said a financial broker in Mumbai. Industry experts also suspect the turnaround of the company to churn out profits will also not be easy.

      Mahindra intends to launch as many as three new car SsangYong models in the next few years in an attempt to revive sales of the company, fifth largest in the sector in that country. Ssangyong had sought bankruptcy protection after continued dismal sales. “There is an opportunity to introduce a premium portfolio of SUVs in the Indian market, providing a new growth avenue for SsangYong and further strengthen our dominant position in the UV segment,” said Pawan Goenka, president - automotive and farm equipment sectors, M&M.

      Mahindra