M&M unlikely to go aggressive

Mahindra & Mahindra (M&M) would not be an aggressive bidder to take over Aston Martin as the valuation was high and would require substantial investment, analysts said today, reacting to an offer received by the Indian company from Investment Dar Co, Aston Martin’s owner, to take over the marquee brand at a reported valuation of $800 million.

The Indian company is still consolidating its operations with Korean firm Ssyanyong by launching products from its portfolio. It took over Ssyangyong in 2010. M&M would rather wait for the valuation to come down or a cheaper option than make an aggressive offer for Aston Martin, said an analyst. Toyota is another car major that has started due diligence on Aston Martin.

An M&M official refused to comment, citing a company policy not to comment on speculation. Earlier this year, M&M was in the race to buy Swedish car maker SAAB AG but backed out over valuation issues. Saab was later taken over by a local company. “M&M had negotiated for Saab with General Motors to acquire technology despite the established fact that the company maintained it was a strong utility vehicle player. M&M wants to be a diversified player in the automobile space and the company has said it is open to acquisitions. The asking price for Saab was close to $500 million and this appears to be even more expensive,” a Chennai-based auto analyst said.

One of the reasons M&M may be interested in Aston Martin is that it does not have any super-luxury car model in its portfolio. Rival Tata Motors is reaping rich dividends by buying JLR, whose global profits are helping the parent post good results.