Maruti Suzuki India Limited (MSIL) has announced the approval of a merger between Suzuki Motor Gujarat Private Limited (SMG), its wholly owned subsidiary, into and with MSIL. The decision was finalized during a board meeting held on January 29, 2025, following an in-principle nod given in October 2024. The scheme of amalgamation is expected to enhance operational efficiencies, streamline decision-making, and optimize resource utilization by integrating the two entities. The merger remains subject to approvals from shareholders, creditors, the National Company Law Tribunal (NCLT), and other regulatory authorities.
The merger is aimed at simplifying Maruti Suzuki’s corporate structure, eliminating administrative duplications, and fostering a more agile decision-making process. By consolidating operations, the company anticipates better cost rationalization, improved manufacturing performance, and enhanced business synergies. MSIL highlighted that the integration would enable faster decision-making and align all business units under a single operational framework, improve financial, technical, and managerial resource allocation, optimize cost structures, and maximize shareholder value. The company expects efficiency metrics, including hours per vehicle (HPV) and direct pass rates, to improve significantly while facilitating cross-functional learning and best practice sharing across plants.
As SMG is a wholly owned subsidiary of MSIL, no new shares will be issued, and there will be no impact on the shareholding pattern. Post-merger, MSIL’s shareholding structure will remain unchanged, with Suzuki Motor Corporation and group holding 58.28% and public shareholders accounting for 41.72%. As per financial figures recorded on March 31, 2024, Maruti Suzuki India Limited reported net assets of ₹83,982 crore and revenue of ₹1,40,932.6 crore, while Suzuki Motor Gujarat recorded net assets of ₹12,885.9 crore and revenue of ₹39,406.4 crore.
The merger is classified as a related party transaction since SMG is fully owned by MSIL. However, under SEBI and Companies Act exemptions, it is not subject to arm’s length pricing requirements. Additionally, no cash consideration will be involved as SMG’s shares will be extinguished post-merger. The merger will now await approval from regulatory bodies, including SEBI and NCLT, with implementation expected over the coming months.
Industry analysts view the merger as a strategic move that strengthens Maruti Suzuki’s position as India’s leading passenger vehicle manufacturer. The consolidation is expected to improve operational efficiency, reduce costs, and enhance overall competitiveness. Investors are closely watching the stock, as this development could lead to further market confidence in Maruti Suzuki’s long-term growth prospects.
