Mahindra to Buy Stake in Ssangyong
“The securing of a solid partner who has both financial capability and is engaged in diverse markets will allow Ssangyong to emerge as a global SUV player through the strengthening of R&D, investments in product development, better business competitiveness and global sales expansion”, said Lee on behalf of the South Korean carmaker.
“The coming together of Mahindra and Ssangyong will result in a competitive global UV player. Together with its financial capability, Mahindra offers competence in sourcing and marketing strategy while Ssangyong has strong capabilities in technology. We are committed to leverage the combined synergies by investing in a new Ssangyong product portfolio to gain momentum in global markets”, said president Goenka.
He added: “There is also an opportunity to introduce a premium portfolio of SUVs in the Indian market providing a new growth avenue for Ssangyong and further strengthening our dominant position in the utility vehicle (UV) segment.”
Mahindra said it was committed to "nurturing the Ssangyong brand in global markets while preserving its Korean heritage. It is intended that SYMC will continue to function as an independent entity with primarily a Korean management. The acquisition will offer financial stability to SYMC and the two companies will work to further strengthen Ssangyong’s product portfolio across the globe. The inherent strengths of Ssangyong combined with Mahindra’s expertise will help in building a global SUV major."
Simultaneously, the labour unions of both companies signed a multilateral agreement, laying down conditions for employment protection, long term investment and commitment for no labour dispute.
The total cost of the 70% stake that Mahindra will acquire in Ssangyong is US $463 million with US $378 million in new stock and US $85 million in corporate bonds. The purchase will be completed in early 2011.