Mahindra & Mahindra announced that it has signed a memorandum of understanding with South Korea’s Ssangyong Motor Company, to acquire a majority stake in the aot-maker. Earlier, it had announced its selection as a preferred bidder for the loss-making company which sells sports utility vehicles under brands such as Rexton, New Kyron and Actyon.
M&M was selected by Ssangyong after evaluating various tangible and intangible factors. These include the total bid consideration, proposed equity investment, assumption of bond-related liabilities and financing plans. In addition, its capability to grow the company, how it proposed to manage the company and its guarantees for maintaining existing employees and contracts were also considered.
M&M would have paid 5% of the total bid amount to Ssangyong, as this was a pre-condition for signing the MoU. Next in the process will be an inspection of the manufacturing facilities, to be done in September, confirmation of the financial terms, which will be followed by the actual hand-over in November. Financial details, including the percentage of equity stake being acquired or the amount to be paid, have not been disclosed yet.
Related Story: Mahindra is the preferred bidder for Ssangyong