Mahindra & Mahindra today announced that it will acquire 55.2 per cent stake in electric carmaker Reva, marking its entry into the alternative fuel-based passenger vehicle space.
The two companies today signed an agreement, under which M&M will acquire 55.2 per cent stake in Reva Electric Car Company by a combination of equity purchase from Reva's promoters and a fresh infusion of over Rs 45 crore into the company, the homegrown auto major said.
Post the buyout, the Bangalore-based company will be renamed as Mahindra Reva Electric Vehicle Co Ltd with M&M's President for the Automotive business Pawan Goenka as its chairman.
Reva's Deputy Chairman and Chief Technology Officer Chetan Maini will play the role of Chief of Technology and Strategy in Mahindra Reva.
"This is a key strategic acquisition for Mahindra in its march towards sustainable mobility. Mahindra and REVA bring together complementary strengths," Goenka said.
With M&M's global distribution network, REVA's vehicles have a potential to significantly gain in market penetration, he added.
Under the agreement, the new board of Mahindra Reva will have five nominees from M&M, two from Reva's founder the Maini family and one from California-based AEV LLC, Reva's co-founder.
"
The EV market is poised to grow significantly and we conclude that in order to seize the opportunity, we needed the resources and experience of a major automotive manufacturer," Maini said.
As a result of M&M's investment, Mahindra Reva will be able to "scale, innovate and accelerate" and will be able to deliver better products to more customers in more places, he added.