Mergers & Acquisition in CV space: Mahindra to acquire 58.96% in SML Isuzu
Earlier in March 2025 there was a buzz that
Ashok Leyland will acquire SML Isuzu but the company outrightly declined this
report.
Now M&M announced acquisition of SML Isuzu
at a price of Rs. 650 per share amounting to Rs. 555 crores.
The market price of the company stood at Rs.
1,773 per share on 25th April 2025, seems like M&M got a deal at
the good price.
The company holds a 16% market share in the Intermediate
Light Commercial Vehicle (ILCV) bus segment. SML has a strong legacy, a loyal
customer base and a great product portfolio which will help Mahindra to achieve
its goal of increasing its market share in this segment to 6% by FY31 and over
20% by FY36.
Mahindra & Mahindra has a
strong 52% market presence in the light commercial vehicles segment by this
strategic acquisition not only increase market share in CV space but also improve
its operating efficiency by consolidating platforms, unifying supplier and
dealer networks, and optimising manufacturing capacity.
It will help M&M in to double
its market share in the commercial vehicle segment and drive growth in its
Trucks and Buses Division, positioning itself as a key player in the expanding
Indian CV market.
Following this M&M will make
a mandatory open offer to acquire up to 26% stake from public shareholders of
SML in accordance with SEBI regulations.
This strategic acquisition will make M&M one
of a dominate player.
What is Mandatory Open Offer
Under SEBI SAST Regulations:
When a company undergoes a
significant change in ownership, minority shareholders often face uncertainty (SEBI
SAST Regulations) are designed to protect them by mandating an Open
Offer in certain scenarios.
An open offer is triggered under
the following conditions:
- Acquisition of 25% or more voting
rights (Regulation 3(1)).
- Creeping acquisition beyond 5% in a financial year
when holding is between 25%-75% (Regulation 3(2)).
- Indirect acquisition of control of the
company (Regulation 4).
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