Suzuki Motor Corp. to increase its stake in Maruti India by 5%

The Suzuki Motor Corp (SMU), a Japanese automaker is contemplating on purchasing 5% of Maruti Suzuki India shares as per the reports, there-by taking the Suzuki Motor Corp. stakes in its Indian subsidiary by 59%. This venture has been long standing and speculated to take place as a “creeping acquisition” over a period of one year.

It is considered that the present time is ripe for this sort of deal to go through and as it is a live deal, not much information is out yet. According to a close source, the talks over this deal had started three months prior to the Japan disaster and had initiated the process by taking the necessary approvals, but then, the acquisition was delayed. As Suzuki Motor Corp. feels this is the right time to go ahead with the deal, they intend to buy out 5% of the stock from the open market.

According to the regulations of SEMI, any stake holder with 55-75% of stakes can further increase it by only 5% in one go, more over it can only be an open offer. However, Mr R.C. Bhargava, chairman of Maruti Suzuki India has said that they are not informed of Suzuki Motor Corp.’s buy-out and not likely to know yet, if they go by the open market and will only be aware of it during the next board meeting.


It is also supposed that this 5% stake acquisition might be a part of greater plan to increase the stake holding in Maruti India, which enables the increase in the revenue stream for the parent company from its Indian subsidiary as almost every second SMU car is in Indian market up for sales. Based on stock market reports by 12th of this month, the share price of 5% of Maruti India stakes are calculated to be a little less than $400 million A 21.09% of the stake is believed to be held by Life Insurance Corporation, ICICI Prudential Life Insurance and Bajaj Alliance Life.