Maruti Suzuki Board approves ₹12,841 crore acquisition of Suzuki Gujarat

Maruti Suzuki India’s Board of Directors approved the acquisition of Suzuki Motor Gujarat’s (SMG) entire paid-up equity share capital.

Maruti Suzuki India’s Board of Directors, in a meeting on Tuesday, approved the acquisition of Suzuki Motor Gujarat’s (SMG) entire paid-up equity share capital, consisting of 12,84,11,07,500 equity shares at ₹10 each. The total purchase consideration for this acquisition is ₹12,841.1 crore. Maruti Suzuki will discharge the purchase consideration by issuing and allotting 1,23,22,514 equity shares of the company with a face value of ₹5 each to Suzuki Motor Corporation (SMC) at ₹10,420.85 per equity share on a preferential basis.

This purchase needs approval from regulators and laws, including a vote from minority shareholders through mail. The deal is considered a related party transaction, and it will follow the current laws to ensure a fair and unbiased process.

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RBSA Valuation Advisors LLP, an Independent Registered Valuer, has issued a valuation report to oversee the transaction. The voting for shareholder approval will take place from Wednesday until November 16. The expected completion period for the acquisition is before March 31, 2024. Maruti Suzuki India’s shares closed at ₹10,742.05 apiece on the BSE on Tuesday, reflecting a 0.31% increase.

Background information reveals that Maruti Suzuki India had previously approved the issuance of shares on a preferential basis to Suzuki Motor Corporation as part of the consideration for acquiring a 100% stake in Suzuki Motor Gujarat. Following the acquisition, Suzuki Motor Gujarat will become a wholly-owned subsidiary of Maruti Suzuki India. The deal involves terminating the contract manufacturing agreement with Suzuki Motor Gujarat, and the acquisition of its shares is in line with applicable laws and regulations.