Mahindra & Mahindra announced on Saturday the completion of its acquisition of a 58.96% controlling stake in commercial vehicle manufacturer SML Isuzu Ltd., which has now been renamed SML Mahindra Ltd.
M&M has also reconstituted the company's board, appointing Mahindra Group veteran Vinod Sahay as its Executive Chairman, effective August 3. Venkat Srinivas has been named Executive Director & Chief Executive Officer of SML, effective August 1.
Sahay will continue his role as President for aerospace and defence, trucks, buses & CE Mahindra Group, while Srinivas will also retain his position as Business Head for Mahindra Truck & Bus (MTB) and Construction Equipment (CE).
M&M had initially signed the share purchase agreement in April this year to acquire the 58.96% stake in SML Isuzu Ltd. from Japan's Sumitomo Corporation and Isuzu Motors Limited for Rs 555 crore. Following this, the Competition Commission of India granted its approval in June.
As part of the transaction, M&M will also launch a mandatory open offer to acquire up to 26% stake from eligible public shareholders of SML, in accordance with SEBI Takeover Regulations. The board of SML has already approved the name change to 'SML Mahindra Limited,' pending necessary regulatory and shareholder approvals.
This acquisition marks a significant strategic move for M&M, bolstering its presence in the 3.5T Commercial Vehicle (CV) segment, where it currently holds a 3% market share. This is a stark contrast to its dominant 54.2% market share in the Sub-3.5 tonne Light Commercial Vehicle (LCV) segment.
M&M has articulated ambitious plans, stating that the acquisition will immediately double its market share in the 3.5T CV segment to 6%, with targets to increase this to 10-12% by FY31 and further to over 20% by FY36.
Established in 1983, SML is a listed entity with a robust pan-India footprint in the 'trucks and buses' segment, holding a market-leading position in the 'ILCV (Intermediate and Light Commercial Vehicles) Buses segment with approximately 16% market share.
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