Mahindra Aims to Dominate MHCV Segment with SML Isuzu Acquisition
Mahindra & Mahindra, a prominent Indian automaker, has announced its intention to significantly increase its market share in the medium and heavy commercial vehicle (MHCV) segment through a strategic acquisition. The company aims to double its MHCV market share to 10-12 per cent by FY 2030-31 and more than 20 per cent by FY 2035-36 with this move.
Mahindra will acquire nearly a 59 per cent stake in SML Isuzu, a joint venture between Indian investors and Japanese automaker Isuzu Motors, for around ₹555 crore. This acquisition complements Mahindra's existing offerings in the trucks and buses segment and will help the company improve its stake in the MHCV segment, which currently stands at 3 per cent compared to 52 per cent in the light commercial vehicle (LCV) segment.
The acquisition will involve Mahindra purchasing a 58.96 per cent stake in SML Isuzu at ₹650 per share. Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra, stated that SML Isuzu brings a strong legacy, loyal customer base, and a credible product portfolio to the table. Additionally, Mahindra will make an open offer in accordance with SEBI Takeover Regulations for 26 per cent from eligible public shareholders.
The acquisition will involve purchasing a 15 per cent stake from Isuzu Motors and a 43.96 per cent stake from Sumitomo Corporation, the primary promoter.
Mahindra's acquisition of a majority stake in SML Isuzu is expected to strengthen its stake in the MHCV segment. The acquisition brings a strong product portfolio and a loyal customer base, which will complement Mahindra's existing offerings. The company aims to double its MHCV market share in the coming years, and this acquisition is a significant step towards achieving that goal.
