Indian auto giant, Mahindra & Mahindra has said that it will soon acquire the stake of its US based partner, Navistar Group from their two joint ventures between the two companies.
Mahindra & Mahindra will acquire Navistar's stake in joint ventures for manufacturing of truck and buses, and engines in a deal valued at Rs 175 crore in $33 million. M&M President for Automotive and Farm Equipment Sectors, Pawan Goenka described the deal as a friendly buyout as Navistar is looking to focus on its core business activities.
Mahindra Navistar Automotives joint venture partnership was launched in 2005 and has since been struggling to expand its presence in the India market that is dominated by Tata Motors and Ashok Leyland. The two companies had also set up Mahindra Navistar Engines in 2007 for producing engines in 2010. M&M had 51 per cent stake and Navistar had 49 per cent in both the joint ventures.
Troy Clarke, president, Navistar said in a statement, "While the Indian market has not expanded as we had expected and industry challenges there continue in the near term, we still see promise in India going forward."
After the deal is finalized, the two units will become wholly owned subsidiaries of M&M
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