Utility vehicle and tractor major, Mahindra & Mahindra today signed a definitive agreement to buy 70 per cent in the troubled South Korean vehicle maker SsangYong Motor Company (SYMC) for $463 million (Rs 2083 crore).
The agreement was signed by Yooil Lee and Youngtae Park, joint court appointed receivers of SYMC and Pawan Goenka, president automotive and farm equipment sectors, M&M in Korea. M&M has agreed to subscribe to new stock of SsangYong worth $378 million and $85 million in corporate bonds.
M&M is expecting the approval of revised corporate rehabilitation plan by the creditors of SsangYong in January, while the acquisition is expected to be complete by February or March.
SYMC is undergoing a corporate rehabilitation process since February 2009 and the court receivership will conclude upon court approval and the termination of corporate rehabilitation process.
Goenka said, "The coming together of Mahindra and SsangYong will result in a competitive global UV player. Together with its financial capability, M&M offers competence in sourcing and marketing strategy while SsangYong has strong capabilities in technology. We are committed to leverage the combined synergies by investing in a new SsangYong product portfolio to gain momentum in global markets".
"There is an opportunity to introduce a premium portfolio of SUVs in the Indian market, providing a new growth avenue for SsangYong and further strengthen our dominant position in the UV segment", he added.
The labour union of SYMC, M&M and SYMC have also signed a tripartite agreement which contains provisions for employment protection, long term investment and commitment for no labour dispute.
