M&M, Ruias shortlisted as final bidders for Ssangyong Motors
05 Jun 2010
Mahindra & Mahindra and the Ruia group have been short-listed by Ssangyong Motor to bid with four other companies for the troubled sports utility vehicle maker. Analysts say the deal could be worth up to $500 million.
Ssangyong said yesterday that among the seven companies that had expressed interest in the acquisition, it has shortlisted six, but declined to reveal the identity of the company that had failed to qualify. Due diligence is set to be conducted from 7 June to 16 July and binding bids would have to be submitted by 20 July.
Other shortlisted companies include French automaker Renault, South Korean, aluminium producer SM Group, private equity fund Seoul Invest and Young An Hat, the maker of Daewoo buses. The Kolkata-based Ruia group, owners of tyre company Dunlop, has set up a special purpose entity to bid for Ssangyong, according to a person close to the development.
The group has proven expertise in turning around sick companies and Ssangyong has been under bankruptcy protection since early 2009. The automobile sector has been an area of interest for the group according to analysts. The group is credited with turning around Dunlop and engineering firm Jessop.
According to analysts M&M will get access to Asian markets and a low-cost engineering and supply base with Ssangyong. The company had in 2008 withdrawn from bidding for Jaguar Land Rover, which was later picked up by the Tata Group.
They say Renault had a good chance of emerging the frontrunner because its unit Renault Samsung has a factory in South Korea. The Ssangyong facility will facilitate broad-basing of its portfolio.
The sale is being handled by KPMG and Macquarie.
Chinese automaker, SAIC paid $500 million for a 51-per cent stake in Ssangyong in 2004. However, the economic crisis has left the Korean company deeply in the read after it hit a sales slump during the period.
