Mahindra & Mahindra (M&M), India's leading utility vehicle manufacturer, has announced its decision to buy Navistar Group's stake in their two joint ventures in India, viz. Mahindra Navistar Automotives Limited (MNAL) and Mahindra Navistar Engines Private Limited (MNEPL).

M&M said it would acquire the 49 per cent stake held its US-based partner Navistar in both JVs for Rs 175 crore (around $33 million).

The Mahindra-Navistar 51:49 per cent stake MNAL and MNEPL JVs were formed in 2005 and 2007, respectively.

After acquiring its Navistar Group's stake in MNAL and MNEPL, the two manufacturing facilities will become wholly-owned subsidiaries of the Indian utility vehicle manufacturer. However under the terms of the stake sale deal, Mahindra would keep on providing engineering services to Navistar, while Navistar could keep on sourcing components from India.

Navistar said it decided to sell its stake to M&M in order to reallocate its capital to focus on its future priorities. Troy Clarke, president of Navistar, said, "Given Navistar's 2013 priorities, our capital and focus need to be allocated to other business opportunities in the near term."

But, some experts believe that Navistar decided to quit the JVs because they could not produce the desired results.

The stake sale requires regulatory approval, and is expected to be completed by early next year.