New Delhi: Leading Indian vehicle manufacturer Mahindra announced Tuesday a binding offer to buy a majority stake in France’s Peugeot Motorcycles, the world’s oldest motorcycle-maker, as it seeks new technology to drive sales.
Mahindra Two Wheelers Ltd, an unlisted arm of Mahindra & Mahindra, said its “binding offer” for the 51-percent stake would involve a 15-million-euro ($19-million) injection into Peugeot Motorcycles, part of the Paris-based PSA Group.
In a statement, Mahindra, part of the $16.5-billion Mahindra Group, called the offer a “win-win” for both companies.
“The coming together of Mahindra and Peugeot is a win-win for the two-wheeler business for both companies,” said Mahindra & Mahindra executive director Pawan Goenka, who gave no additional financial details about the transaction.
Mahindra gave assurances that Peugeot Motorcycles would not lose its French identity under the Indian firm.
Mahindra & Mahindra is India’s biggest utility vehicle-maker and flagship of the Mahindra Group led by industrialist Anand Mahindra, a member of one of India’s richest business families.
“Mahindra would offer access to the India market, mass market product technology and competence in marketing while Peugeot brings premium range, a strong European footprint, and a globally recognised brand,” Goenka said.
The announcement caps lengthy talks between the two companies and comes as Peugeot under new chief executive Carlos Tavares strives to return to profit.
The scooter unit has suffered losses in the face of strong competition from rivals.
The acquisition, bringing with it sophisticated new technology, could boost Mahindra’s efforts to compete against local rivals Hero MotoCorp and Honda in the vast Indian two-wheeler segment, analysts say.
Mahindra & Mahindra has been strengthening its position in the two-wheeler segment globally with sales operations in Latin America, Africa and South Asia.
The partnership would enable both Mahindra and Peugeot Motorcycles to “speed (up) their international expansion,” Goenka said.
The management approach outlined by Mahindra for Peugeot Motorcycles is in line with the one the Indian company followed in its $378-million purchase of a 70 per cent stake in troubled South Korean automaker SsangYong in 2011.
