Mahindra & Mahindra Ltd (M&M) has announced plans to acquire a 58.96% stake in SML Isuzu Ltd (SML) for Rs 555 crore at Rs 650 per share. This strategic move is set to strengthen Mahindra’s footprint in the Indian commercial vehicle (CV) market, especially in the medium and heavy truck and bus segments.
Following the acquisition, Mahindra will also launch a mandatory open offer to acquire up to 26% additional stake from public shareholders, in line with SEBI Takeover Regulations.
Why Mahindra Is Acquiring SML Isuzu
Mahindra currently holds a dominant 52% market share in the LCV (below 3.5 tonnes) segment but only 3% in the >3.5-tonne CV space. The SML Isuzu acquisition is expected to:
- Double Mahindra’s market share in >3.5T CVs to 6% immediately
- Grow to 10–12% by FY31
- Target 20%+ by FY36
This move positions Mahindra to become a full-range player across commercial vehicles.
What SML Isuzu Brings to the Table
Established in 1983, SML Isuzu is a trusted brand in India’s truck and bus market, with:
- 16% share in the ILCV bus segment
- Proven cost-efficient manufacturing
- Operating revenue of Rs 2,196 crore and EBITDA of Rs 179 crore in FY24
Through SML’s strong legacy, Mahindra gains access to an established customer base, robust engineering capabilities, and an extensive distribution network.
Deal Details and Next Steps
Key highlights of the transaction:
- M&M will acquire 43.96% from Sumitomo Corporation and 15% from Isuzu Motors Ltd.
- The deal is subject to regulatory approvals, including clearance from the Competition Commission of India (CCI).
- Transaction completion is expected in 2025.
Kotak Investment Banking is advising on the financial side, while Khaitan & Co is the legal advisor.
Strategic Synergies Ahead
The acquisition is expected to unlock significant synergies, including:
- Expanded distribution and service networks
- Cost optimization and operational efficiencies
- Stronger branding and product innovation
- Talent and technology integration
According to Mahindra’s leadership, this acquisition is a core part of its broader strategy to invest in businesses with strong growth potential and operational strengths.
