Mahindra to acquire controlling stake in SML Isuzu for ₹555 crore

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Mahindra & Mahindra (M&M) on Saturday announced that it has entered into an agreement to acquire a 58.96 per cent stake in SML Isuzu (SML) for Rs 555 crore. The move is aimed at expanding M&M’s presence in the commercial vehicle (CV) segment above 3.5 tonnes, where the company currently holds a 3 per cent market share

 

The acquisition will be made at Rs 650 per share. Following this, M&M will launch a mandatory open offer under SEBI’s takeover regulations to acquire up to an additional 26 per cent stake from public shareholders.

 

M&M has a 52 per cent share in the sub-3.5T light commercial vehicle (LCV) market. With this transaction, M&M expects to double its market share in the >3.5T segment to 6 per cent initially, and further targets 10–12 per cent by FY31 and over 20 per cent by FY36.

 

Incorporated in 1983, SML Isuzu is a listed player with a presence across India in the trucks and buses segment. It holds about 16 per cent market share in the intermediate and light commercial vehicle (ILCV) bus segment. In FY24, SML reported operating revenue of Rs 2,196 crore and an Ebitda of Rs 179 crore.

 

As part of the transaction, M&M will acquire 43.96 per cent stake from Sumitomo Corporation and 15 percent stake from Isuzu Motors, both existing shareholders of SML. The deal is subject to regulatory approvals, including from the Competition Commission of India, and is expected to be completed within 2025.

 

The acquisition is expected to provide operational synergies across manufacturing, cost, supplier networks, and product development. M&M stated that its trucks and buses division has made progress in recent years, and the integration with SML is aimed at improving manufacturing utilization and broadening product offerings.

 

Anish Shah, Group CEO and MD of Mahindra Group, said the acquisition aligns with the company’s strategy of focusing capital allocation on businesses with growth potential. Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, M&M, said the acquisition would help expand Mahindra’s product range and consolidate supplier and dealer networks.

 

Kotak Investment Banking is acting as financial advisor and manager to the open offer, while Khaitan & Co is the legal advisor to M&M.

 

Founded in 1945, Mahindra Group operates in sectors including farm equipment, utility vehicles, IT, and financial services, and has a presence in over 100 countries.

 

Sumitomo Corporation, listed in Tokyo, is an integrated trading and business investment company operating across steel, automotive, construction, lifestyle, mineral resources, chemicals, and energy sectors.

 

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