28 Apr 2025
Strategic Acquisition to Strengthen M&M's Presence in the >3.5T Commercial Vehicle Segment
Mahindra & Mahindra Ltd. (M&M) has entered into an agreement to acquire a 58.96% stake in SML Isuzu Ltd. (SML), at INR 650 per share, amounting to INR 555 crore. The acquisition is part of M&M's strategy to solidify its foothold in the >3.5T commercial vehicle (CV) segment, where the company currently holds a 3% market share. This step is in line with M&M's broader vision of expanding its presence in the commercial vehicle market.
Key Highlights of the Acquisition
- Transaction Overview: M&M will acquire the entire 43.96% stake from Sumitomo Corporation and 15% from Isuzu Motors Ltd., totaling INR 555 crore. Additionally, M&M will launch a mandatory open offer for up to 26% of the shares from public shareholders, in compliance with SEBI Takeover Regulations.
- Market Expansion: This acquisition will boost M&M's market share in the >3.5T CV segment from 3% to 6%. The company plans to grow this share to 10–12% by FY31 and 20%+ by FY36.
- Synergies & Value Unlocking: M&M sees significant potential in unlocking synergies in cost, network, brand, manufacturing, talent, and product complementarities between M&M and SML Isuzu.
SML Isuzu's Strong Legacy and Market Position
Founded in 1983, SML Isuzu is a prominent player in the trucks and buses segment in India, with a strong vintage and pan-India presence. The company holds a market-leading position in the ILCV buses segment, commanding a 16% market share. For FY24, SML reported operating revenue of INR 2,196 crore and EBITDA of INR 179 crore. Its profitable operations, cost-effective manufacturing, and robust engineering capabilities make it an attractive addition to Mahindra's portfolio.
Statements from Mahindra Group Leaders
Dr. Anish Shah, Group CEO & MD of Mahindra Group, commented, “The acquisition of SML Isuzu marks a significant milestone in Mahindra Group's vision of delivering 5x growth in our emerging businesses. This acquisition aligns with our capital allocation strategy, focusing on high-potential growth areas that have a strong right to win and demonstrated operational excellence.”
Mr. Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, M&M Ltd., shared, “SML brings a strong legacy, a loyal customer base, and a credible product portfolio that complements Mahindra’s existing offerings in the trucks and buses segment. This acquisition is a crucial step toward becoming a full-range, formidable player in commercial vehicles, enhancing our market coverage, consolidating platforms, and improving operating leverage.”
Outlook for Future Growth
Looking ahead, this acquisition is expected to play a pivotal role in Mahindra's long-term strategy, contributing to its vision of becoming a dominant force in the commercial vehicle sector by FY36. With a robust product portfolio and an ambitious growth roadmap, Mahindra & Mahindra is set to unlock new avenues of success, shaping the future of India's commercial vehicle landscape.
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