Mahindra & Mahindra Ltd (M&M) has announced it will acquire a 58.96% stake in SML Isuzu Ltd (SML) for ₹555 crore. The acquisition will be made at a price of ₹650 per share. In addition, M&M will launch a mandatory open offer for up to 26% stake from public shareholders, in line with SEBI Takeover Regulations.
The proposed acquisition is aimed at strengthening M&M’s position in the commercial vehicle market, specifically in the >3.5T segment where it currently holds a 3% share. M&M’s presence in the 3.5T segment is expected to double to 6%, with plans to increase it to 10–12% by FY31 and over 20% by FY36.
Acquisition strategy and transaction details
SML Isuzu, incorporated in 1983, operates in the trucks and buses segment and reported operating revenue of ₹2,196 crore and EBITDA of ₹179 crore in FY24. The company holds a 16% market share in the Intermediate Light Commercial Vehicle (ILCV) bus segment.
Under the agreement, M&M will acquire the 43.96% stake held by Sumitomo Corporation and a 15% stake held by Isuzu Motors Ltd, a public shareholder in SML. The acquisition is subject to approval from the Competition Commission of India and is expected to be completed within 2025.
Dr Anish Shah, Group CEO and Managing Director of the Mahindra Group, said, “The acquisition of SML Isuzu marks a significant milestone in Mahindra Group’s vision of delivering 5x growth in our emerging businesses. This acquisition is aligned with our capital allocation strategy for investing in high potential growth areas which have a strong right to win and have demonstrated operational excellence.”
Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra Ltd, said, “SML brings a strong legacy, a loyal customer base, and a credible product portfolio that complements Mahindra’s existing offerings in the trucks and buses segment. This acquisition is a pivotal step toward our ambition to become a full-range, formidable player in commercial vehicles by enhancing market coverage, unlocking operating leverage through platform consolidation, a unified supplier and network base, and better plant utilisation. Together, we are well-positioned to scale rapidly and drive profitable growth.”Kotak Investment Banking is acting as the financial adviser to M&M and manager to the open offer. Khaitan & Co acted as legal adviser to M&M.
