You are here: Home » Companies » News
Business Standard

M&M to acquire 55% stake in Meru for cash consideration of Rs 201.5 cr

Under the agreement, after investment of the first tranche in Meru, M&M will have the right to appoint majority of the directors on the board of Meru and will control its composition

Topics
Mahindra and Mahindra | Mahindra & Mahindra | M&M

Press Trust of India  |  New delhi 

Mahindra & Mahindra
File photo: The logo of Mahindra and Mahindra is seen at a showroom in Mumbai

Homegrown utility vehicles major is acquiring 55 per cent stake in ride hailing and radio taxi operator Meru Travel Solutions for a cash consideration of up to Rs 201.5 crore, according to a regulatory filing by the company.

The company signed a share subscription and shareholder agreement on Saturday for subscribing up to 55 per cent of equity share capital of Meru Travel Solutions Pvt Ltd in tranches, said in a BSE filing.

Under the agreement, after investment of the first tranche in Meru, will have the right to appoint majority of the directors on the board of Meru and will control its composition, it added.

"Upon obtaining such right, Meru will become a subsidiary of the company," said, adding subsidiaries of Meru -- Meru Mobility Tech Pvt Ltd, V-Link Automotive Services Pvt Ltd and V-Link Fleet Solutions Pvt Ltd -- would in turn also become subsidiaries of

As per the filing, the acquisition will be through cash consideration and M&M would invest an amount not exceeding Rs 201.5 crore in Meru.

Under the deal structure, M&M will make a primary investment of an amount not exceeding Rs 103.5 crore for a stake of up to 55 per cent in Meru in tranches.

The agreement also envisages M&M to have the right of call option to acquire shares from certain existing investors of Meru and these existing investors of Meru would have put option to sell shares for an amount not exceeding Rs 98 crore, it added.

Meru, which was incorporated in December 2006, had clocked consolidated revenue of Rs 156.6 crore in 2018-19, Rs 189.9 crore in 2017-18 and Rs 277.2 crore in 2016-17.

As automobile adapt to the changing times, they have been making investments in new technology driven mobility solutions providers. Earlier this year, South Korea's Hyundai and Kia together had announced that they were investing USD 300 million (about Rs 2,100 crore) in India's ride hailing major Ola.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, September 01 2019. 13:10 IST
RECOMMENDED FOR YOU
.