India's second largest auto maker Mahindra & Mahindra ,has signed a deal with Ssangyong Motor to purchase Ssangyong for for the equivalent of 32 billion ksh in shares and debt in a bid to create a global force in SUVs.
in what analysts say is a new global deposition, Mahindra becomes the second Indian firm to acquire an overseas auto company,after Tata scored big with the acquisition key British marques; land rover and jaguar.
Ssangyong, which like Mahindra mostly makes SUVs, went into court-approved bankruptcy protection early last year amid falling sales, mounting red ink and a history of labor strife.
The South Korean company was once majority-owned by SAIC Motor until the Chinese company lost management control during the bankruptcy process. Mahindra will now have a 70% share in Ssangyong.
The deal came after India's Mahindra was named the preferred bidder for Ssangyong in August. The companies said they expect the deal to be completed in March 2011 after required creditor and court approval of a revised corporate revival plan.