Mahindra & Mahindra has signed a definitive agreement with Ssangyong Motor Company Limited (SYMC) to acquire 70 per cent stake in the South Korean Ssangyong Motors for total cost of USD 463 million (about Rs 2,105 crore). M&M said that the company expects to close the deal by March 2011.
“The coming together of Mahindra and Ssangyong will result in a competitive global UV player. Together with its financial capability, Mahindra offers competence in sourcing and marketing strategy while Ssangyong has strong capabilities in technology,” M&M President, Automotive & Farm Equipment Sectors, Pawan Goenka said.
Commenting on the deal, Receiver of SYMC Yooil Lee said: “The securing of a solid partner who has both financial capability and is engaged in diverse markets will allow Ssangyong to emerge as a global SUV player through the strengthening of R&D, investments in product development, better business competitiveness and global sales expansion.”
It said that M&M has already deposited 10% of the purchasing price per terms of the definitive agreement, and the remaining balance to be deposited three days prior to SYMC’s stakeholder meeting.
SYMC will update its corporate rehabilitation plan to include reference to repaying liabilities with cash-in from the deal, and will be required to receive approval from creditors and the court on the updated plan.
After completing all the acquisition procedures and the repayment of rehabilitation claims, the corporate rehabilitation process is likely to be finished by March, 2011, the statement added. The creditors will approve the revised corporate rehabilitation plan by January 2011.