M&M may pick up a stake in Skoda Auto’s India business

The headquarters of the Indian automaker Mahindra & Mahindra are located in Mumbai, Maharashtra. Originally founded as Mahindra & Mohammed in 1945, it subsequently changed its name to Mahindra & Mahindra. M&M, a division of the Mahindra Group, ranks among India’s top automakers in terms of production.

M&M might buy out 50% of Skoda Auto India

Mahindra and Mahindra, the second-biggest carmaker in India, is considering purchasing a 50% share in Skoda Auto Volkswagen’s Indian business. According to sources, negotiations between the two parties are advanced, and a deal is probably imminent in the coming weeks.

For the stake sale, the German auto giant is reportedly valued at $1 billion. Even though the specifics of the deal, such as its corporate structure, are still being worked out, it is known that Skoda Auto may receive a combination of cash and shares as consideration.

Skoda Auto and M&M can make use of their plants

The deal is viewed as especially valuable for M&M’s passenger car business and is anticipated to assist both Skoda Auto and M&M in better utilizing their current manufacturing capabilities.

The main production sites for M&M and Skoda Auto are located in Chakan, Pune. M&M can produce 840,000 cars annually, whereas Skoda Auto can only produce 180,000. The two automakers will be able to make better use of their plants thanks to the acquisition.

Chakan plants are important for Skoda Auto and M&M

Both automakers have an agreement for the supply of components for electric vehicles, which could also be manufactured at the Chakan plants. M&M announced on February 16 that it and Volkswagen Group had signed a supply agreement for parts of Volkswagen’s modular electric vehicle platform.

About Skoda Auto

Skoda Auto is in charge of the Volkswagen Group’s and its brands’ operations in India. We are constantly thinking about new business prospects and weighing our options to make sure we have the best option to execute our plan in the very dynamic Indian market to fully explore the country’s growth potential. An agreement to supply Mahindra’s purpose-built electric platform with parts of Volkswagen’s MEB was signed earlier this year by the Volkswagen Group and Mahindra, furthering their shared vision for e-mobility cooperation. Mahindra and the Volkswagen Group are still looking into several ways to increase the potential for cooperation, a Skoda Auto Volkswagen representative stated.

The stock of Mahindra & Mahindra Ltd. is trading at over 1% intraday

The stock of Mahindra & Mahindra Ltd. is currently trading at Rs. 2,827.05 per share, up more than 1%, and it is showing a strong upward trend due to the largest deal with Skoda Auto India.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.