Mahindra to acquire 70% stake in SsangYong
The total cost of acquisition is US$463 million, with US$378 million in new stock and US$85 million in corporate bonds.
Mahindra said that the acquisition would aid both companies.
'The coming together of Mahindra and SsangYong will result in a competitive global UV player. Together with its financial capability, Mahindra offers competence in sourcing and marketing strategy while SsangYong has strong capabilities in technology. We are committed to leverage the combined synergies by investing in a new SsangYong product portfolio to gain momentum in global markets,' said Dr Pawan Goenka, president of Mahindra's automotive division.
Dr Goenka added: 'There is also an opportunity to introduce a premium portfolio of SUVs in the Indian market, providing a new growth avenue for SsangYong and further strengthen our dominant position the UV segment.'
SsangYong has been undergoing a corporate rehabilitation process since February 2009.
The acquisition is subject to approval of SsangYong's revised corporate rehabilitation plan by creditors and the court. The acquisition is likely be finished by March 2011.