Mahindra & Mahindra completes acquisition of 59% stake in SML Isuzu

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Mahindra & Mahindra on Saturday said it has completed the acquisition of 58.96 per cent controlling stake in commercial vehicle manufacturer SML Isuzu Ltd and has renamed it as SML Mahindra Ltd (SML).

M&M Ltd also said that it has reconstituted the company's board, which will now be headed by Mahindra Group veteran Vinod Sahay as its Executive Chairman. Venkat Srinivas has been appointed as the Executive Director & Chief Executive Officer of SML, it added.

Sahay is currently president for aerospace and defence, trucks, buses & CE Mahindra Group, a position he will continue to serve, it said.

Sahay's appointment as Executive Chairman of SML Isuzu is effective from August 3 and that of Srinivas from August 1, the company said.

In addition to his new role, Srinivas will continue to serve as the Business Head for Mahindra Truck & Bus (MTB) and Construction Equipment (CE), it said.

M&M had in April this year signed a share purchase agreement to 58.96 per cent stake in SML Isuzu Ltd. (SML) from Japan's Sumitomo Corporation and Isuzu Motors Limited for Rs 555 crore.

The company had also said that as part of the transaction, it would also launch a mandatory open offer for acquisition of up to 26 per cent stake from eligible public shareholders of SML in accordance with the SEBI Takeover Regulations.

The Competition Commission of India in June granted its approval to the acquisition.

The Board of Directors of SML has also approved a change in the name of the company to 'SML Mahindra Limited' subject to approvals from RoC, Central Registration Centre, MCA and shareholders of the company or any other authority as may be necessary, M&M said.

The buyout is a big step for M&M in establishing a strong presence in the 3.5T CV segment, where the company has a 3 per cent market share presently, as compared to a 54.2 per cent market share in the Sub-3.5 tonne LCV segment.

M&M has already said that the acquisition will double the market share to 6 per cent, with plans to increase this to 10-12 per cent by FY31 and further to over 20 per cent by FY36.

Set up in 1983, SML is a listed company with a pan-India presence in the 'trucks and buses 'segment. The company has a market-leading position in the 'ILCV (Intermediate and Light Commercial Vehicles) Buses segment, with around 16 per cent market share, M&M said.