Mahindra completes SsangYong acquisition

Thursday 17 March 2011, 00:00 AM by Vikas Yogi

Mahindra & Mahindra, the largest utility vehicle maker in the Indian market, announced on Tuesday that it has completed the process of acquiring a majority stake in the bankrupt South Korean firm SsangYong Motor Company (SMC).

Mahindra & Mahindra now has a 70 percent stake in this Korean SUV maker, for which Mahindra has shelled out $463 million (about Rs 2,105 crore). Mahindra was selected as a preferred bidder in August 2010. SMC will now invest over 240 KRW (nearly Rs 960 crore) on brand building and product development in the current year. Where the investment on product development will be increased by 70 percent, the investment on Brand building will be enhanced by 60 percent.

Speaking from Seoul, M&M President, Automotive and Farm Sector, Pawan Goenka, said, "These investments will be funded by SMC's internal accruals. After the debt restructuring SMC's balance sheet is clean. Although it is unlikely that it will need debt for this investment, but if needed, it can raise."

Now as the acquisition process has been completed, Mahindra is expected to roll-out some global portfolio SUV’s (Sport Utility Vehicles) of SsangYong in the Indian market in coming months.

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