Utility vehicle maker Mahindra and Mahindra (M&M) is in the last leg to complete its acquisition of South Korean sports utility vehicle (SUV) maker, Ssangyong Motors. It has roped in South Korea’s largest legal firm Bae Kim & Lee to draft the final share purchase agreement to firm up the deal. The company plans to sign the final agreement by the second week of November.
The acquisition would help M&M launch South Korean company’s flagship SUV models Rexton II and Korando C into the Indian market. M&M spokesperson said, “We have a confidentiality clause and cannot comment on these issues.”
M&M and Ssangyong officials are meeting in Seoul next week to discuss the bid adjustment price based on details emerging from due-diligence. “The final price can vary a bit,” said an investment banker close to the negotiation. An analyst tracking the industry said it is expected to be in the price band of $500-550 million. Top executives from M&M, including its automotive division head Pawan Goenka, are expected to be present when the final agreement is signed in Seoul next month.
“The faster culmination of the process would give M&M an edge in launching new products in India, currently world’s second-fastest growing automotive market,” Deepesh Rathore, MD at market research firm IHS Automotive said. The company has developed an all new platform the C200 SUV, which will be the first monocoque chassis produced by the company. M&M is also in the process of picking internal candidates who will work with the Korean management.