M&M in aquisition deal with Kinetic Motors
30 July 2008
Utility vehicles and tractor maker Mahindra &Mahindra today said it is acquiring the business of Pune-based two-wheeler maker Kinetic Motors, in a Rs110 crore all-cash deal (subject to closing due diligence) in a new company in which Kinetic would hold a 20-per cent stake. M&M will hold the remianing majority stake.
Earlier Mahindra was thought to be considering between a 50-per cent and 70-per cent take acquisition in Kinetic Motors at between Rs75 crore and Rs120 crore.
M&M has been evaluating an entry into the low-cost entry level two-wheeler segment (See: M&M evaluating entry into two-wheeler segments), possibly with an eye on the rural markets in which it has a strong hold through its tractor unit, Mahindra Tractors, one of the top three global tractor manufacturers in the world
It is also the market leader in multi-utility vehicles in India and manufactures light commercial vehicles and three-wheelers and has a presence in the passenger car segment through a joint venture with Renault that makes the Logan small sedan.
M&M had also reportedly evinced an interest in Italian bike manufacturer MV Agusta, even while it was speculated to have been eyeing a friendly deal with Kinetic.
The Pune-based scooter-maker was reported to be desperately looking for a buyer for its languishing two-wheelers business. The deal will enable Mahindra to design and market a range of scooters, value-engineered and high-end motorcycles for the Indian and global markets "covering every segment of the industry".