M&M acquires business assets of Kinetic Motor

Auto major, Mahindra & Mahindra (M&M), is set to foray into the two wheeler-business with the company today announcing the acquisition of well-known two-wheeler brand, Kinetic Motors.        

M&M will form a new company--Mahindra Kinetic Scooters & Motorcycles Ltd--which would execute the acquistion of Kinetic by purchasing 'all operating assets of the company', M&M's Chief Financial Officer, Bharat Doshi, told reporters here.        

"The consideration of the acquisition is a sum of Rs 110-crore plus a 20 per cent stake to Kinetic. M&M will hold the balance 80 per cent stake in the company," Doshi said.        
Mahindra's entry into the fast-growing Indian-two wheeler market is expected to intensify the prevailing competition in the segment among leading players such as TVS, Hero Honda and Bajaj.        

 

"The two-wheeler market in the country is still largely under-penetrated. This acquisition will provide greater opportunities, taking us into another orbit," M&M's Vice-Chairman and Managing Director, Anand Mahindra, said.        

Kinetic, which has a large customer base, especially in  the women's two wheeler-segment, will continue as a 'long-term strategic partner' in the new company, said Kinetic's Managing Director, Sulajja Firodia Motwani, who will serve as a non-Executive Director in the new venture.