The auto major on Thursday (17 December 2020) said it will purchase the balance 49% shareholding in Tata Marcopolo Motors (TMML) for a cash consideration of Rs 99.96 crore.
TMML is a 51:49 joint venture formed in 2006 between the Tata Motors and Marcopolo S.A., one of the largest bus and coach manufacturers globally. The JV has manufacturing facilities in Dharwad and Lucknow where it builds bus bodies on chassis supplied and marketed by Tata Motors under the 'Starbus' and 'Starbus Ultra' bus brands.As a consequence of its refreshed business strategy, Marcopolo S.A has decided to exit from the JV and offered to sell its 49% shareholding in the JV to Tata Motors. The acquisition is likely to complete by 28 February 2021.
Post the purchase, TMML will become a wholly owned subsidiary of the company. All technologies pertaining to existing bus body products manufactured will continue to vest with TMML. In addition as part of the transition, Marcopolo S.A. will continue to license the 'Marcopolo' trademarks to TMML for a minimum of 3 years with a non-compete provision in India for a corresponding period. Tata Motors assured that the transaction will not result in any impact on TMML's operations or the continued sales and service of the company's customers.
In FY20, TMML reported net profit of Rs 20.63 crore and turnover of Rs 650.55 crore.
Tata Motors is a global automobile manufacturer of cars, utility vehicles, pick-ups, trucks and buses.
The auto major reported a consolidated net loss of Rs 343.28 crore in Q2 FY21 as compared to a net profit of Rs 175.76 crore in Q2 FY20. Net sales during the quarter declined 18.4% year-on-year (Y-o-Y) to Rs 52,839.02 crore.
Shares of Tata Motors were down 0.14% at Rs 182.25.
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