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Mahindra & Mahindra on Thursday said it has been chosen as the preferred bidder by the beleaguered South Korean vehicle maker SsangYong Motor for acquisition and the deal is likely to be finalised by November this year.
"I think what this deal does for us is provide us with a tremendous opportunity to accelerate our progress towards our stated intention of becoming a globally recognised player in the specific niche of utility vehicles," Mahindra & Mahindra (M&M) Vice Chairman and MD Anand Mahindra.
He said the deal to acquire a majority stake in the Korean firm is likely to be finalised by November this year but did not disclose the financials involved. M&M said it intends to make SsangYong Motor function as an independent entity with Korean management.
The Indian auto major outbid other firms, including Kolkata-based PK Ruia Group, which is the owner of the Dunlop and Falcon tyres. Last week, the M&M board had given the go-ahead to put in a bid for acquiring a majority stake in SM.
Meanwhile, SsangYong Motor (SM) Strategy Department Manager Chung Yong-won told PTI over phone from Seoul: "We have selected Mahindra as the preferred bidder and they are expected to sign the agreement by the end of this month."
As per the "preferred bidder" status, M&M would require to enter into a memorandum of understanding, followed by a confirmatory due diligence process and signing of definitive agreements thereafter.
When asked if SM would consider launching its vehicles in India if the deal gets successful, Yong-won said: "Yes, we will and India may be our one of the next markets."
Earlier SM, which is estimated to be worth around $500 million, had shortlisted six firms for going ahead with a due diligence process. The company had also extended its July 20 deadline to August 10 as the last date for submission of bids.
SM, which has SUV models like 'Rexton', 'Kyron' and 'Actyon' and sedan 'Chairman', has been undergoing a court-led restructuring from 2009 after suffering heavily due to the downturn in auto industry.
China's SAIC Motor Corp owns 10 per cent in the troubled automaker and about 70 per cent is held by creditors, led by state-owned Korea Development Bank. M&M President (Automotive and farm Equipment) Pawan Goenka said SM currently has two manufacturing facilities in South Korea and has an employee strength of 4,800 people.
The company has 138 dealers in its home country, while 1,300 dealers are located across 98 nations. It sold 35,000 units in 2009.
M&M also said once the deal is done, it would consider bringing the premium SUVs from SM's stable into India. In the late afternoon trade, the M&M scrip was trading flat at Rs 631.40 on the Bombay Stock Exchange.