Indian automobile major Tata Motors Limited on Thursday declared that it would purchase the 49% stakes of Marcopolo S.A. in the bus and coach making joint venture Tata Marcopolo Motors Limited for Rs 99.96 crore. In a regulatory filing, Tata Motors further reported that as a consequence of its revised business strategy, Marcopolo S.A has decided to leave from the joint venture and proposed to sell its 49% shareholding in Rs 170 crore capital Tata Marcopolo to it.
According to Tata Motors, the two companies have signed a share purchase agreement whereby the former will buy the balance 49% shareholding in Tata Marcopolo for a cash consideration of Rs 99.96 crore. Tata Motors will pay for per share pegged at Rs 12 to Marcopolo S.A. for the Rs 10 per share of Tata Marcopolo. Post the purchase, Tata Marcopolo, with manufacturing facilities in Dharwad and Lucknow, will be recognised as a wholly-owned subsidiary of Tata Motors.
All technologies falling under the umbrella of existing bus body products manufactured will continue to function under Tata Marcopolo, said Tata Motors. In addition, as part of the transition, Marcopolo S.A. will continue to license the “Marcopolo” trademarks to Tata Marcopolo for a minimum of three years with a non-compete provision in India for a corresponding period. The acquisition is expected to be completed by February 28, 2021. Tata Motors reported an open channel will be kept with Marcopolo S.A. and Tata Marcopolo for future collaboration opportunities around bus body designs and technical consulting services.
“After a successful venture in India, and as a consequence of its refreshed business strategy, Marcopolo S.A has decided to exit from the JV and offered to sell its 49 % shareholding in the JV to the company,” Tata Motors said in a statement.