Driving the Deal: Mahindra to Take the Wheel at SML Isuzu with $65 Million Buyout

Mahindra & Mahindra has entered a definitive agreement to acquire a 58.96% stake in truck and bus manufacturer SML Isuzu for ₹555 crore ($65 million), aiming to double its market share in India’s >3.5T commercial vehicle segment to 6%. The deal includes purchasing 43.96% from Sumitomo Corp and 15% from Isuzu Motors at ₹650/share (a 63% discount to SML’s last close) and launching a ₹1,554.6/share open offer for an additional 26% stake.

 

Strategic goals:

 

Market expansion: Target 10-12% share by FY31 and 20%+ by FY36 through synergies in manufacturing, branding, and distribution.

 

Strengthening portfolios: Leverage SML’s 16% ILCV bus market share and ₹2,196 crore FY24 revenue to bolster Mahindra’s CV division.

 

The acquisition aligns with Mahindra’s capital allocation strategy to invest in high-growth sectors, per CEO Anish Shah.

 

Sources: Reuters, CNBC-TV18, Autocar Pro