Tata Motors to buy out Marcopolo SA in joint venture for Rs100 cr
24 Dec 2020
Tata Motors will acquire the 49 per cent shareholding of Marcopolo SA in their joint venture for Rs99.96 crore ater the Brazilian bus and coach manufacturer decided to exit from the joint venture Tata Marcopolo Motors Ltd (TMML).
According to a statement released by Tata Motors, the company will be purchasing the 49 per cent shareholding in Tata Marcopolo Motors Limited (TMML) for a cash consideration of Rs 99.96 crore, to make it a wholly owned subsidiary of the company.
Tata Motors has stated that all technologies pertaining to existing bus body products manufactured will continue to vest with TMML. Marcopolo SA will continue to license the “Marcopolo” trademarks to TMML for a minimum of 3 years with a non-compete provision in India for a corresponding period.
“The transaction will not result in any impact on TMML’s operations or the continued sales and service of Tata Motors’ customers. Tata Motors, Marcopolo S.A. and TMML intend to maintain an open channel for future collaboration opportunities around bus body designs and technical consulting services,” said Tata Motors.
Marcopolo SA is one of the largest bus and coach manufacturers in the world. The 51:49 JV with Tata Motors was formed in 2006. TMML has manufacturing facilities in Dharwad and Lucknow, where bus bodies under the Starbus and Starbus Ultra brands are built.
The all-cash deal is expected to close by end of February, 2021. "As consequence of its refreshed business strategy, Marcopolo S.A is exiting the JV", said Tata Motors in a statement without elaborating further.
As of end of FY20 TMML recorded a profit of Rs20.63 crore on a turnover of Rs650.55 crore, which was a growth of 13.5 per cent compared to the turnover of Rs573.15 crore registered in FY18.