Mahindra is in talks to acquire Sumitomo’s entire stake in SML Isuzu
Mahindra is in discussions to acquire the entire promoter stake in SML Isuzu Ltd. The potential transaction could signal M&M’s strategic intent to strengthen its presence in the trucks and buses segment.
Insiders suggest that M&M is evaluating a share price in the range of Rs. 1400 to Rs. 1500 for SML Isuzu, which represents a discount of approximately 11% to 17% compared to the company’s current market value. The M&M board is expected to deliberate on the proposal later this week.
As of the December 2023 quarter, Japanese conglomerate Sumitomo Corporation holds a 43.96% stake in SML Isuzu. The company has reportedly been exploring a complete exit from its India operations, with earlier reports in June 2023 indicating JBM Auto as a key contender for the stake.
When contacted for comment, Mahindra declined to respond to market speculation. SML Isuzu has not yet issued a statement on the matter.
The market responded swiftly to the developments. SML Isuzu shares rebounded during trading and were up by around 1%, quoted at Rs. 1665.6. M&M shares, although off their intraday lows, were still trading 1.8% lower at Rs. 2753. Meanwhile, JBM Auto witnessed a sharp uptick, rising by over 12% to Rs. 630 following the news.
The development has sparked renewed interest in the commercial vehicle segment, especially as industry players look to consolidate and expand in a recovering market.
