CCI approves M&M-Ford joint venture in India
11 February 2020
The Competition Commission of India (CCI) has approved the formation of a joint venture between Mahindra & Mahindra and Ford Motor Co and the transfer of the automotive business of Ford India to the joint venture.
The proposed combination envisages the formation of a joint venture, namely Ardour Automotive Private Limited, between Mahindra and Mahindra Limited (M&M) and Ford Motor Company (FMC); and the transfer of the automotive business (except powertrain business at Sanand) of Ford India Private Limited (FIPL) to the joint venture.
In October last year, M&M and Ford Motor Company signed a definitive agreement to create a JV that will develop, market and distribute Ford brand vehicles in India and Ford brand and Mahindra brand vehicles in high-growth emerging markets around the world.
M&M will hold 51 per cent controlling stake in the JV while Ford will have the remaining stake of 49 per cent. Ford will transfer its India operations to the JV, including its personnel and assembly plants in Chennai and Sanand.
Ford will retain the Ford engine plant operations in Sanand as well as the global business services unit, Ford Credit and Ford Smart Mobility.
The joint venture will be operationally managed by M&M, and its governance will be equally composed of representatives of M&M and Ford. The joint venture will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Ford will continue to own the Ford brand, and its branded vehicles will be distributed through the current Ford India dealer network. M&M will continue to own the M&M brand and operate its own independent dealer network in India.
M&M is publicly traded on the National Stock Exchange and the Bombay Stock Exchange. The Mahindra group has diversified interests across various sectors, including automotive, farm equipment, agricultural products and services, smaller range power generation equipment, financial services, information technology, logistics, alternative energy, aerospace, steel processing, trading, insurance broking, real estate and infrastructure, and hospitality.
FMC is an American automobile company. It has operations in various countries such as the United States, Canada, Mexico, China, the United Kingdom, Germany, Turkey, Brazil, Argentina, Australia, and South Africa. FIPL is indirect wholly owned subsidiary of FMC.
CCI said it will issue a detailed order soon.