Mahindra to acquire Kinetic Motors
Friday, August 1st, 2008Mahindra & Mahindra Ltd. (M&M), one of India’s leading automotive companies, today announced that its Board of Directors has approved the acquisition of business assets of Pune-based Kinetic Motor Company Ltd. (KMCL). The acquisition will be done through a New Company to be formed.
The consideration for the acquisition is a sum of Rs. 110 crores (subject to closing due diligence) plus 20 percent stake to KMCL in the New Co. M&M will hold the balance 80 per cent of the equity. The deal will enable Mahindra to design and market a range of scooters, value engineered motorcycles and high-end motorcycles for the Indian and global markets, helping it establish a robust, end-to-end two-wheeler business in every segment of the industry.
Ms. Sulajja Firodia Motwani will be a Non-Executive Director in the new company. Within the overall two-wheeler strategy, scooters will form M&M’s entry point into the Indian market and will be an important part of the company’s overall two-wheeler product portfolio. There are several macro environmental trends which make the scooter market especially attractive to Mahindra.
These include a younger, more affluent customer base with a significant number of empowered women and increased scooter demand in tier-2 cities and small towns. M&M is strongly positioned to cater to this demand, given the company’s significant presence and brand equity in these markets.
