Mahindra Strengthens Its Commercial Vehicle Portfolio with SML Isuzu Acquisition

Mahindra & Mahindra has made a strategic move in the commercial vehicle segment by acquiring a majority stake in SML Isuzu Ltd. The transaction, worth ₹555 crore, is for the acquisition of 43.96% of its shares from Sumitomo Corporation and a further 15% of shares from Isuzu Motors.

 

The deal is likely to strengthen Mahindra's footprint in the medium and heavy commercial vehicle space, where it enjoys a small market share. By combining SML Isuzu's experience in making trucks and buses, Mahindra plans to strengthen its offerings and increase its presence in the sector.

 

SML Isuzu, which was founded in 1983, has a well-established brand in India's commercial vehicle segment, especially in the intermediate light commercial vehicle bus segment, where it enjoys a market share of 16%. The company's operating revenue stood at ₹2,196 crore and its EBITDA at ₹179 crore during the previous fiscal year.

 

Mahindra's management has underscored the strategic significance of this acquisition, underlining synergies in manufacturing, supply chains, and brand positioning. The company intends to utilize SML Isuzu's strengths to accelerate innovation and efficiency in its commercial vehicle business.

 

The deal is pending regulatory approvals, including approval from the Competition Commission of India, and is anticipated to be completed within 2025.

 

Sources: Sumitomo Corporation, Economic Times, Moneycontrol, Livemint, MSN News, Equity Bulls, GoodReturns, CarToq