M&M will also make an open offer to acquire 26% stake from eligible public shareholders of SML Isuzu, in accordance with the SEBI takeover regulations, it said in an exchange filing.
As part of the transaction, M&M will acquire the entire 43.96% stake held by Sumitomo Corporation, the promoter of SML Isuzu, and also the 15% stake held by Isuzu Motors, designated as a public shareholder.
The acquisition of the promoter stake will be done at a price of ₹650 per share, which is a discount of 63% to SML Isuzu’s closing price on Friday.
The price for the Open Offer for public shareholders has been fixed at ₹1,554.6 per share, which is a discount of 13% to SML Isuzu’s closing price on Friday.
Through this acquisition, M&M intends to establish a strong presence in the commercial vehicle segment in excess of 3.5 tonnes. M&M currently has a 3% market share in this segment and this acquisition will double the same to 6%, the company said in a statement.
The plan is to further increase the market share to between 10% and 12% by financial year 2031 and to 20% by financial year 2036.
“SML offers significant potential to unlock value through synergies in cost, network, brand, manufacturing, talent and product complementarities,” M&M said in its statement. “Our trucks and buses have developed strengths by tapping into technology, design and innovation, and sourcing from our auto business. Together, this will be a powerful combination.”
Mahindra Group CEO and Managing Director Anish Shah said that the acquisition is aligned with the company’s capital allocation strategy for investing in high potential growth areas.
SML Isuzu has a 16% market share in the ILCV buses segment and had reported an operating revenue of ₹2,196 crore and an Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of ₹179 crore in financial year 2024.
CNBC Awaaz had reported on March 24 that M&M is in talks to buy the entire promoter stake of SML Isuzu.
Shares of Mahindra & Mahindra had ended 1.25% lower on Friday at ₹2,865. The stock has gained 4.5% in the last one month.
