New Delhi: Mahindra & Mahindra and BAE Systems are now all set to launch a Joint Venture (JV) in India focused on land systems for the Indian market. The launch takes place after approval for the project was granted by the Government of India's Foreign Investment Promotions Board.
In a statement both the companies said the JV would be set up in accordance with current Foreign Direct Investment regulations. Accordingly, the equity split will be 74 per cent with Mahindra & Mahindra and 26 per cent with BAE Systems.
Both companies said they would now finalise detailed planning and structural arrangements with the intention of commencing JV operations as early as the second quarter of 2009.
Anand Mahindra, vice chairman and managing director, Mahindra & Mahindra, said: ''Our JV with BAE Systems is a strategic initiative by the Mahindra Group to achieve a leadership position in the land systems defence domain. I am certain that our companies are an excellent and complementary fit and the co-operation with a leader like BAE Systems will indeed help us design and develop cutting edge products. These solutions will provide greatly enhanced capability for our Indian land forces and open up export markets not previously within our reach.''
Ian King, chief executive, BAE Systems, said: ''This is an exciting opportunity and is the first step in BAE Systems' plans to grow long term businesses in India in multiple sectors across the breadth and depth of the company's global capabilities in land, sea, air and security. The ever strengthening relationship between Mahindra & Mahindra and BAE Systems is an excellent basis on which to develop a company that is founded with the express purpose of serving the Indian armed forces and the Indian economy through the creation of high quality jobs, the development of innovative technologies and system integration skills, and the leadership of two world class companies.''
Headquartered in Delhi, with manufacturing in Faridabad, the JV will initially employ 50-60 people. Initial work is likely to include the up-armouring of Rakshak vehicles, Axe vehicle production, and starting the process of developing a mine resistant-ambush protected vehicle suitable for India.
BAE Systems is the premier global defence and aerospace company delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, information technology solutions and customer support services. With approximately 100,000 employees worldwide, BAE Systems' sales exceeded £15.7 billion ($31.4 billion) in 2007.
The $6.7 billion Mahindra Group is among the top ten industrial houses in India. Mahindra is the market leader in multi-utility vehicles in India.
It is the only Indian company among the top tractor brands in the world. Mahindra's Farm Equipment Sector has recently won the Japan Quality Medal, the only tractor company worldwide to be bestowed this honour. It also holds the distinction of being the only tractor company worldwide to win the Deming Prize.
The US based Reputation Institute recently ranked Mahindra among the top 10 Indian companies in its Global 200: The World's Best Corporate Reputations list.