Mumbai-headquartered auto maker Mahindra & Mahindra (M&M), India's largest utility vehicle maker has been named the preferred bidder to buy a controlling stake in cash-trapped Ssangyong Motor, South Korea's fourth-largest automobile manufacturer said today.
In a filing with the stock exchange, Seoul-based Ssangyong said that it will sign a memorandum of understanding with the M&M and allow the Indian car maker to conduct due diligence in September aimed at concluding the deal by November.
Ssangyong said that M&M was chosen as the preferred bidder after reviewing all bids, funding power and willingness to revive the company.
Without revealing M&M's bid price, Ssangyong said it would ask M&M to deposit five per cent of its bid price by the end of the month.
Ssangyong, which is currently under court-led bankruptcy protection, also said that if talks with M&M fail, it would then begin to negotiate with India's Raghav Industries Ltd, an investment affiliate of Indian conglomerate Ruia Group.
Six interested parties had bid for Ssangyong, but South Korean private equity fund Seoul Invest and a group led by the French-Japanese combine of Renault-Nissan dropped out of the race early this week leaving M&M, the Ruia Group and Young An Hat Co., a south Korean headgear company that also owns bus maker Daewoo Bus Co.
Mumbai-based M&M hopes that the acquisition of Ssangyong will give it the needed technology to add to its range of SUV's as well as an entry into markets in Russia and the Far East, where Ssangyong has a presence.