Shares of SML Isuzu hit a 10% lower circuit after Mahindra & Mahindra Limited (M&M) announced definitive agreements to acquire a 58.96% stake in the company for Rs 555 crore. This move marks a major step for Mahindra to strengthen its presence in the trucks and buses segment.
The acquisition involves purchasing 43.96% equity from Sumitomo Corporation and 15% from Isuzu Motors Limited at Rs 650 per share. Furthermore, M&M will launch a mandatory open offer to acquire up to 26% of public shareholding at Rs 1,554.60 per share, following SEBI’s Takeover Regulations.
Post-transaction, SML Isuzu will become a listed subsidiary of Mahindra, giving the auto giant complete control.
Strategically, this acquisition aligns with Mahindra’s goal to expand in the commercial vehicle space. While M&M commands a dominant 52% share in the sub-3.5 tonne LCV segment, it currently holds only 3% in the >3.5T CV category. The deal is expected to double Mahindra’s market share to 6% immediately, with an ambitious target of 10-12% by FY31 and over 20% by FY36.
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