M&M signs MOU with South Korea’s Ssangyong Motor
23 Aug 2010
Mahindra & Mahindra (M&M), India's largest utility vehicle maker, today said that it has signed a memorandum of understanding (MOU) to buy a controlling stake in cash-trapped Ssangyong Motor, South Korea's fourth-largest automobile manufacturer.
Without revealing details of the offer made by M&M, Seoul-based Ssangyong also confirmed the signing of the MOU in a regulatory filing to the Seoul Stock Exchange.
On 12 August, Mumbai-headquartered M&M was named the preferred bidder for SsangYong, which has been under court-led bankruptcy protection since January 2009.
"Ssangyong has good experiences in the R&D and innovation areas and Ssangyong will have a good chance in India where demand for sport utility vehicles is fast rising," said Anand Mahindra, vice chairman of M&M in a press conference after being named the preferred bidder by the South Korean carmaker's creditors.
Since the past year, M&M has been seeking to diversify its automobile business to include the whole range from two-wheelers to heavy trucks and tractors through acquisitions and joint ventures.
In 2008, M&M acquired the business of Pune-based two-wheeler maker Kinetic Motor Company in an Rs110 crore all-cash deal to merge it into a new company in which M&M holds an 80-per cent stake with Kinetic holding the rest.