Indian automobile major Tata Motors Ltd on Thursday said it would buy the 49 per cent stakes of Marcopolo S.A. in the bus and coach making joint venture Tata Marcopolo Motors Ltd for Rs 99.96 crore (Dh 49.6 million).
In a regulatory filing, Tata Motors said that as a consequence of its refreshed business strategy, Marcopolo S.A has decided to exit from the joint venture and offered to sell its 49 per cent shareholding in Rs 170 crore (Dh84.3 million) capital Tata Marcopolo to it.
According to Tata Motors, the two companies have entered into a share purchase agreement whereby the former will purchase the balance 49 per cent shareholding in Tata Marcopolo for a cash consideration of Rs 99.96 crore.
Tata Motors will pay a price of Rs 12 per share to Marcopolo S.A. for the Rs 10 per share of Tata Marcopolo.
Last fiscal, Tata Marcopolo had made an after tax profit of Rs 20.63 crore.
Post the purchase, Tata Marcopolo, with manufacturing facilities in Dharwad and Lucknow, will become a wholly-owned subsidiary of Tata Motors.
All technologies pertaining to existing bus body products manufactured will continue to vest with Tata Marcopolo, said Tata Motors.
In addition, as part of the transition, Marcopolo S.A. will continue to license the "Marcopolo" trademarks to Tata Marcopolo for a minimum of three years with a non-compete provision in India for a corresponding period.
The acquisition is expected to be completed by February 28, 2021.
Tata Motors said, an open channel will be maintained with Marcopolo S.A. and Tata Marcopolo for future collaboration opportunities around bus body designs and technical consulting services.
TMML is a 51:49 JV formed in 2006 between Tata Motors and Marcopolo S.A., one of the largest bus and coach manufacturers globally.
Since its incorporation, the JV has introduced several new design and concepts helping redefine the premium bus body segment in India.
"After a successful venture in India, and as a consequence of its refreshed business strategy, Marcopolo S.A has decided to exit from the JV and offered to sell its 49 per cent shareholding in the JV to the company," Tata Motors said in a statement.
