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Ssangyong Motors and Mahindra deal etched in stone
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Mahindra has now officially acquired Korean SUV maker Ssangyong for Rs. 2108 crore (US$ 463 million), and will now consolidate itself into becoming a well-rounded global SUV company.
Having made some strategic moves both on the technology and marketing front, the Mahindra Group has transformed itself into an international auto brand, and from the looks of it is on its way to far greater accolades in the coming years.
For a company that lost its shot at acquiring the legendary British car brands two years ago Mahindra came back strongly with its strategic acquisition of the Korean SUV maker SsangYong Motor in August 2010. The agreement, which has so far been in the due diligence process has now finally reached a definitive consensus, and the two companies have now announced an unconditional agreement in Seoul.
Having invested a whopping Rs. 2,108 crore (US$ 463 million) with US$ 378 million in new stock and US$ 85 million in corporate bonds, Mahindra has now acquired a 70% stake in its Korean subsidiary.
Speaking positively on SsangYong Motors behalf, Yooil Lee said, "The securing of a solid partner who has both financial capability and is engaged in diverse markets will allow SsangYong to emerge as a global SUV player through the strengthening of R&D, investments in product development, better business competitiveness and global sales expansion."
The acquisition will now offer financial stability to SYMC, while Mahindra benefits from the inherent technical strengths of Ssangyong. Similarly, the wide sales and distribution network of the Mahindra group will now offer better positioning for SsangYong products and provide it access to many overseas markets.
The two companies are in the process of completing administrative procedures for the final approval of the revised corporate rehabilitation plan by creditors, and are looking forward to the final hand over sometime in February /March 2011.
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