Mahindra soon to acquire 70 per cent stakes of Ssangyong

Mahindra & Mahindra, has finalized the deal to buy 70 per cent share in Ssangyong, the South Korean car maker firm. In August, 2010, M&M was chosen by the Federal court as the preferred bidder for the company. The Indian auto major is expected to take over the debt ridden company by March 2011.

Mahindra & Mahindra India, will be paying $463 million (almost Rs 2,100 crore), the amount is split in equity investment which is $378 million which will repay the debts of the company and the rest of the amount $ 85 million will be the corporate bonds in the company. Against this, Mahindra & Mahindra will get 70 per cent of the share in the Korean auto company which has a global presence in the auto industry. The Ssangyong owns range of power vehicles such as luxury sedan, four sports utility vehicles and one multi utility vehicle.

This deal with the Ssangyong will give technical support to the company by making more advanced powertrains and will also automatically help in increasing its global worth. Mahindra India, knows that, with the technology it has currently in its SUVs, it can not stand the competition in the global markets. Mahindra India, will support the South Korean car maker in the marketing strategies, financial outlooks and expanding its horizons. On the other hand, the Korean SUVs experts will enhance the technology of the Indian company.

As per the industry experts, the amount paid by the Indian car company was dear but it is surely a good strategy by the company to establish its footprints in India. It is also being speculated that, the profits will be certainly a big challenge in front of the company.

As per the future plans, Mahindra India, is expected to launch three cars of Ssangyong in the coming years time, which will pump the sales of the Indian auto company. Pawan Goenka, the president of the automotive and farm equipments of Mahindra & Mahindra, said that, the company has huge potential and opportunity to invest in the SUVs and introduce these cars in the domestic auto market. It will enhance the growth of the Korean company and also will build stronger position in the utility segment in the domestic market.

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