By Santanu Choudhury
NEW DELHI--Mahindra & Mahindra Ltd. (50520.BY), India's
largest sport-utility vehicle maker, said Tuesday that it has
completed the purchase of a controlling 51% stake in the scooter
unit of France's PSA Peugeot Citroen (PUGOY).
Under the deal, Mahindra Two Wheelers Ltd., an unlisted unit of
Mahindra, has invested EUR15 million ($17 million) in Peugeot
Motocycles, while purchasing shares held by PSA. The remaining
stake will be held by PSA.
A new board of directors comprising three members from Mahindra
and two from Peugeot has also been formed, Mahindra said in a
statement.
The completion of the deal--which was announced last
October--marks yet another milestone in efforts by Mahindra to grow
its presence worldwide especially in the developed markets of
Europe and the U.S. In 2010, Mahindra paid $463 million to buy a
majority stake in SsangYong Motor Co. of South Korea. In May, the
company opened an assembly line for electric scooters and a new
research and development center in the U.S.
Pawan Goenka, executive director of Mahindra, said the company
is "committed to the long term growth of Peugeot Motocycles" and
that the partnership would enable both companies to "speed up their
international expansion by driving synergies and leveraging
respective strengths."
The stake purchase provides Mahindra with access to Peugeot's
premium range of scooters, a bigger foothold in Europe and a brand
that is well-recognized worldwide. Peugeot Motocycles, also known
as Peugeot Scooters, will get access to the Indian two-wheeler
market--the world's second largest by volume--and technology to
produce more affordable scooters.
Peugeot now produces two- and three-wheeled scooters with 50cc
to 400cc engines at its plants in France and China.
Mahindra--the flagship of the diversified Mahindra Group--sells
its tractors in the U.S. and China, and its Scorpio and XUV500
brand of sport-utility vehicles are also sold around the globe.
Write to Santanu Choudhury at santanu.choudhury@wsj.com
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