In a move targeted to strengthen the trucks and bus segment, Indian automaker Mahindra & Mahindra will acquire a 58.96 per cent stake in SML Isuzu for ₹555 crore.
M&M will acquire the entire stake of 43.96 per cent from Sumitomo Corporation, promoter of SML, and separately also acquire a 15 per cent stake held by Isuzu Motors Ltd. public shareholder of SML, for an aggregate consideration of ₹555 crore. The company will also launch an open offer for the acquisition of up to 26 per cent from public shareholders of SML, as per the SEBI Takeover Regulations.
The acquisition will double the company’s market share to 6 per cent and further increase it to between 10 to 12 per cent by FY31 and 20 per cent by FY36. The automaker stated that the acquisition will establish its strong presence in the commercial vehicle segment of greater than 3.5 tonnes. In this segment, M&M has a market share of 3 per cent.
“The acquisition of SML Isuzu marks a significant milestone in Mahindra Group’s vision of delivering 5x growth in our emerging businesses. This acquisition is aligned with our capital allocation strategy for investing in high-potential growth areas, which have a strong right to win and have demonstrated operational excellence,” said Anish Shah, Group CEO & MD of the Mahindra Group.
ILCV bus segment
SML is a market leader in the ILCV Buses segment with nearly 16 per cent market share. The company reported an operating revenue of ₹2,196 crore and EBITDA of ₹179 crore in FY24. businessline had earlier reported that M&M is in talks to acquire the promoter’s stake of Japan’s Sumitomo Corporation in the commercial vehicle manufacturer SML Isuzu in India.
“This acquisition is a pivotal step toward our ambition to become a full-range, formidable player in commercial vehicles by enhancing market coverage, unlocking operating leverage through platform consolidation, a unified supplier and network base, and better plant utilisation,” said Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra Ltd.
The Mahindra Group had recently rejigged its top leadership and appointed Farm Equipment sector head Hemant Sikka as the Managing Director and Chief Executive Officer (CEO) of Mahindra Logistics (MLL), Veejay Nakra as the President of the Farm Equipment business, and R Velusamy, who is currently President of Automotive Technology and Product Development, will be appointed as President of the Automotive Business and R Velusamy, as President of the Automotive Business.
Published on April 26, 2025
