Mahindra & Mahindra (M&M) today said that its subsidiary Mahindra Defence Systems will acquire BAE Systems' 26-per cent stake in their defence joint venture, Defence Land Systems India (DLSI), ending a three-year partnership with Britain's biggest aerospace company.
The move comes just a year after the London-based company appointed Dean McCumiskey as managing director and chief executive of its Indian operations in place of Andrew Gallagher in order to lead the next phase of BAE Systems' business development in the country. (See: Dean McCumiskey to head BAE Systems in India)
"This decision is a reflection of the shareholders' belief that they can best meet emerging customer requirements and address the opportunities in this dynamic market with a flexible, tailored approach that was not easily facilitated by the structure of the existing joint-venture entity," both companies said in a joint statement.
The two companies had set up the JV in 2009 to develop new technologies and the manufacture of trusted armoured vehicles like the Axe, Rakshak, Marksman, up-armoured and bulletproof Scorpios and Boleros, and Rapid Intervention Vehicles. (See: Mahindra, BAE Systems set up defence JV for land systems)
At present, DLSI produces combat vehicles such as Rakshak, Rakshak Plus, Marksman and MPVi, armoured bus, riot intervention vehicle and Scorpio Uparmoured for VIP security.
The company's Prithla plant has a capacity to produce up to 800 vehicles a year, of which up to 120 are MPV-Is. In the last three to four years the company has invested about Rs60 crore on the plant.