Mahindra & Mahindra in talks to acquire Sumitomo's stake in SML Isuzu

Mahindra & Mahindra (M&M) is reportedly in advanced discussions to acquire the entire stake held by Japan’s Sumitomo Corporation in Indian commercial vehicle manufacturer SML Isuzu, according to a CNBC-Awaaz report.

 

The potential acquisition could mark M&M’s strategic entry into the trucks and buses segment, allowing it to expand beyond its current portfolio of passenger and light commercial vehicles. Sources told the channel that M&M is evaluating a share price of ₹1,400–1,500 for SML Isuzu in the proposed deal.

 

Following the news, SML Isuzu shares surged 7.9 per cent intraday to hit a high of ₹1,785.80. At 2:40 pm, the stock was trading 5 per cent higher at ₹1,738.40, with the company's market capitalisation reaching ₹2,518.57 crore. The stock has a 52-week high of ₹2,406.00 and a 52-week low of ₹1,030.90.

 

The report further stated that M&M’s board is expected to meet this week to assess the acquisition proposal. In response, M&M told the channel that it “does not wish to comment on the speculation.”

 

As of December 2024, Sumitomo Corporation owned 43.96 per cent of SML Isuzu, according to stock exchange data. Japan’s Isuzu Motors, known globally for its SUVs and pickup trucks, holds a 15 per cent stake in SML Isuzu through a separate entity.

 

The company’s recent financial performance has been under pressure. SML Isuzu’s net profit plunged 80.22 per cent to ₹0.53 crore in the quarter ending December 2024, compared to ₹2.68 crore in the same period a year earlier. Sales fell 14.07 per cent year-on-year to ₹331.80 crore from ₹386.13 crore.

 

Meanwhile, M&M shares were trading 1.27 per cent lower at ₹2,766 apiece on the BSE at 2:40 pm on March 24.

 

This is not the first time a potential acquisition for SML Isuzu has been reported. In June 2023, CNBC-TV18 reported that JBM Auto was among the frontrunners to acquire SML Isuzu, as Sumitomo Corporation was seeking to exit its India operations.

 

If the deal goes through, M&M’s foray into the heavy vehicle segment could intensify competition in India’s commercial vehicle space, currently dominated by Tata Motors and Ashok Leyland.