Mahindra & Mahindra Eyes Sumitomo’s Stake in SML Isuzu – Latest Update
Mahindra & Mahindra is in talks to acquire Sumitomo Corporation's 44% stake in SML Isuzu, strengthening its position in the commercial vehicle sector. Get the latest updates on this potential deal and its market impact.
kowshik Reddy
At a late stage in the negotiation, Mahindra & Mahindra (M&M), India's second-largest auto company, has entered into an advanced discussion with Japan-based Sumitomo Corporation to acquire the entire 44% stake it currently has in SML Isuzu, a firm that specializes in the production of trucks and buses. This is all about moving M&M into the heavy commercial vehicle segment, complementing what M&M is in passenger and light commercial vehicles.
The sources claim that M&M plans to offer between Rs1,400 and Rs1,500 a share to acquire Sumitomo's stake, valuing SML Isuzu at about Rs2,026 crore or about $236 million. Such sources further added that the company's shares surged after such news emerged, reflecting high expectations from investors regarding the acquisition.
M&M's board is reported to meet this week to discuss the possible deal. Although the company has declined to comment on market speculation, industry analysts say that this acquisition could be a game-changer in terms of M&M's market presence for trucks and buses and improved positioning against rivals such as Tata Motors and Ashok Leyland.
As of December 2024, Sumitomo Corporation held 43.96% of SML Isuzu, while Japan's Isuzu Motors owned 15%. The potential deal underlines the strategy that M&M pursues to diversify and strengthen its offerings in the commercial vehicle market.
