German PE firm acquires 80% stake in Mahindra-owned Peugeot Motorcycles

Mutares SE & Co, a German private equity firm, will acquire 80 per cent controlling stake in Mahindra Two Wheeler Europe Holding-owned Peugeot Motorcycles (PMTC), Mahindra said in a filing to the stock exchanges on Thursday.

"Mutares has submitted an irrevocable binding offer to acquire 50 per cent of equity and a controlling stake of 80 per cent in Peugeot Motocycles (PMTC)," it said. M&M remains co-shareholder to support new product launches and the strong growth expected in the coming years, it said. 

The Munich-based private equity holding company has a portfolio of 32 companies and has a presence across Europe. It specialises in acquiring medium-sized companies in special situations, based in Europe, which show significant operational improvement potential and then sell them again after taking it through a repositioning and stabilization process.

MTWE bought 51 per cent in PMTC from Groupe PSA in 2015. In October 2019, it acquired 100 per cent stake in  the French firm.  Subsequently, with PMTC facing multiple headwinds due to outbreak of Covid-19, it kept PMTC “under review” as part of the Mahindra Group’s larger strategy to either turnaround the underperforming companies or exit from them.

Two years ago, M&M announced that it would only stay invested in those companies that meet the criterion of a 18 per cent return on equity, clear profitability and strategic importance. Since then it has exited many of the companies includes Mahindra Automotive North America and Ssangyong Automotive

Post the latest transaction, MTWE’s stake will drop to 50 per cent and voting rights will reduce to 20 pc While Purple, the PE firm’s subsidiary, will hold 80 pc voting rights. The closing of the transaction is expected in the first quarter of 2023 after consultation of the works councils and is subject to approval of the antitrust authorities.

Peugeot Motocycles is headquartered in Mandeure, France and generates revenues of approximately EUR 140 million. It manufactures two and three-wheeler scooters which are distributed across 3,000 points of sale through subsidiaries, importers, and dealers in France and internationally, across three continents.

The company has its own manufacturing facility in Mandeure, a joint venture with JNQQ (Jinan Qingqi Motorcycle Co., Ltd.) in China, as well as manufacturing partnerships with several large Asian players including THACO in Vietnam.

"With an established track-record of transforming companies across Europe, coupled with their expertise in the automotive business, Mutares is an ideal partner to strengthen and grow the brand with continuing support from M&M,"  said  Rajesh Jejurikar, Executive Director, Auto & Farm Sectors, M&M in the statement. 

“This will be Mutares’ thirteenth acquisition in 2022,'' stated Laumann, Chief Investment Officer of Mutares.  "We are very proud to be associated with the brand and I strongly believe that we will be able to leverage the true potential of the company based on our vast experience in the industry and strong operational team and together with our partner M&M. Furthermore, Peugeot Motocycles acts as an OEM and we see a huge potential of strong synergies arising within our Automotive & Mobility segment,” he said.