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"Korea is one of the world's leading centres of automotive excellence and Ssangyong brings with it a rich legacy of R&D and innovation. Mahindra and Ssangyong will create synergy, which will make us signiñcant global players."1
-Anand Mahindra (Vice Chairman and Managing Director, Mahindra and Mahindra Ltd).
Introduction
On 2 August 2010,Mahindra and Mahindra Ltd. (M&M), the flagship company of the USD 7.1 billion Mahindra group, entered into an agreement with the ailing Ssangyong Motor Company (SYMC) to acquire majority stake in SYMC. Details regarding the deal were not released officially. However, industry analysts estimated that the deal could be valued at USD 500-550 million. SYMC is the fifth-largest automaker in South Korea with a market value of USD 369 million.Speaking to journalists, Dr Pawan Goenka, President of M&M's Automotive and Farm Division said that if all goes through,the combined sales of the two companies would be in excess of USD 4 billion. He further said,"We have looked at each and every beneñt and concern and gathered every possible piece of information about the company...the potential upside is far higher than any risk we have taken."2 M&M is expected to complete the acquisition in four months. 7/ all goes well, it will be about four months before we are able to complete the acquisition"3 Goenka said.
The Mahindra group is one of the top 10 industrial houses in India and employs more than 1,00,000 people in India and overseas. The group has key presence in financial services, trade, retail and logistics, automotive components, information technology and infrastructure development. The USbased Reputation Institute recently ranked Mahindra among the top 10 Indian companies in its Global 200: The World's Best Corporate Reputations List. In 2010, M&M was also listed in the Credit Suisse Top 27 'Great Brands of Tomorrow', the only one of two Indian companies to be featured in the list along with leading global brands like Apple, Mercedes, Swatch, Facebook.com and Alibaba.com.
In the financial year ending 31 March 2010, M&M sold 2,86,713 vehicles in the domestic market, a growth of 30% over the previous year.4 The company's domestic utility vehicles (UV) sales volume increased 41.7% to 1,50,726 units, as against growth of 20% for industry UV sales,thus increasing its already dominant market share...