Indian Auto giant, Mahindra & Mahindra on Tuesday has announced the completion of the acquisition of SsangYong Motor Company (SMC).based in South Korea.
The company has taken over the major stakes of this South Korean company and thus has acquired its operations. Mahindra has announced as the preferred bidder in the year 2010. And now the company has overtaken a total of 70% stake in SMC by making a total investment of $463 million which is equal to about Rs 2,105 crore. With this acquisition the management control of SMC will be taken over by Mahindra & Mahindra.For this new change, the South Korean company has decided that it will make an investment of 240 KRW which is somewhere around Rs 960 crore in the year 2011 to develop their brand image and product as well. Thus the investment in product development by the company will increase to 70% in 2011, as against the last year figures of KRW 200 billion which is equal to Rs 800 crore. Moreover an investment of 40 billion KRW which is equal to Rs 160 crore is also made with a view to develop the brand image of the company in Korea. These figures are are a straight jump of 60% against that of last year.
The company’s investment in overseas markets is also increased up by four folds in 2011. Addressing the issue, M&M President, Automotive and Farm Sector, Pawan Goenka has commented that these investments will be funded by SMC after restructuring its debts which will clear its balance sheet. He also stated that the company might not need to raise debts for this fund but if needed the company will take essential steps. Goenka also declared Yoo-il Lee to be the new CEO of SMC, while Dilip Sundaram as a representative of Mahindra & Mahindra will be the CFO.
