Mahindra & Mahindra (M&M) rose 2.05% to Rs 585.50 after the auto major raised its shareholding in Sampo Rosenlew Oy to 74.97% from 49.14%.M&M after market hours on Thursday announced that it converted 480 compulsorily convertible preference shares of Sampo Rosenlew Oy, Finland, into 1,440 equity shares and exercised a call option to acquire 633 equity shares from the owners of Sampo.
Accordingly, the voting rights of the company in Sampo would increased from 49.14% to upto 74.97%, and Sampo would become a subsidiary of M&M.
Finland's Sampo Rosenlew has a turnover of around Euro 50 million. The company's main products are combine harvesters and forest machines. Sampo Rosenlew currently sells its machines to over 50 countries and exports approximately 90% of its products. The main markets are Europe, CIS countries, Americasand North Africa.
M&M has been a shareholder in Sampo Rosenlew since July 2016. Since then the two companies have closely worked on a global alliance to drive the growth of their combine harvester and forest machine businesses in various parts of the world. In line with M&M's governance principles for associate companies Sampo-Rosenlew will continue to be run as a stand-alone, independent business unit while simultaneously leveraging synergies where possible.
Sampo brings to M&M world class technology in combine harvesting for the core M&M markets of India, Asia and Africa. The M&M backing provides Sampo with growth opportunities in newer export markets, also enabling Sampo to leverage M&M's strength in manufacturing, sourcing, and distribution.
Mahindra Group's business is diversified across farm equipment, auto and automotive components, real estate, hospitality, information technology, defence and aerospace and financial services.
M&M's consolidated net profit slumped 93.9% to Rs 54.64 crore on a 37.3% decline in net sales to Rs 16,321.34 crore in Q1 June 2020 over Q1 June 2019.
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