Mahindra Two Wheelers has announced that it has made an offer to acquire the scooter arm of French automobile manufacturer, Peugeot. The deal is expected to facilitate Mahindra’s access to European technology as well as help it expand its two-wheeler operations in global markets.
"Mahindra Two Wheelers Ltd (MTWL), an unlisted subsidiary of Mahindra & Mahindra Ltd and part of the USD 16.5 billion Mahindra Group, has made a part of the Euro 54 billion PSA Group based in France," the Mumbai-based company said in a statement issued to the National Stock Exchange.
The deal comes quick on the heels of Peugeot appointing a new CEO, Carlos Tavares who took charge of the loss-making company in March, this year. The deal will see Peugeot Motorcycles get an infusion of EUR 15 million (Rs 116.17 crore) from M&M to finance its new projects.
Speaking about the deal, Dr. Pawan Goenka, executive director, M&M said, “The coming together of Mahindra and Peugeot is a win-win for two wheeler businesses of both companies. Mahindra would offer access to the Indian market, mass market product technology and competence in marketing while Peugeot brings premium range, a strong European footprint, and a globally recognised brand.”
Despite being a part of Europe’s second-largest automaker, Peugeot Motorcycles has been posting losses for the past decade as it is having a tough time keeping up with Piaggio group, the owners of Vespa scooters. The financial infusion and Mahindra’s prowess in low-cost manufacturing is expected to turn the tables for Peugeot, as it aims to regain its profitability.
Mahindra & Mahindra marked its entry into the Indian two-wheeler market when it acquired a majority stake in Kinetic Motors in 2008, and since then, has been slowly expanding its line-up. The company recently added the Gusto to its portfolio, which has been positioned in the fastest growing segment in the Indian two-wheeler market.
