Mahindra & Mahindra Ltd. (M&M) and Navistar International Corporation (NYSE: NAV) have announced that M&M has completed its purchase of the Navistar Group’s stake in Mahindra Navistar Automotives Ltd (MNAL) and Mahindra Navistar Engines Pvt Ltd (MNEPL).
The deal has received regulatory approval in India and Mahindra has now taken complete ownership of operations and continues to sell MNAL and MNEPL products.
“Mahindra remains committed to growing its presence in the Indian commercial vehicle industry with Mahindra’s Truck and Engine businesses continuing to play a critical role in helping us achieve this goal,” said Dr. Pawan Goenka, president, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd.
“Mahindra has been a valuable partner these last seven years and they are well equipped to move the MNAL and MNEPL businesses forward as the Indian market continues to develop,” said Troy Clarke, president and chief operating officer, Navistar. “We thank Mahindra for their collaboration and appreciate their support in our decision to redirect our resources to other near-term opportunities for Navistar.”
It was earlier announced by Navistar that its intention to exit the joint ventures as part of its “Drive to Deliver” turnaround strategy, which is focused on strengthening its North American core businesses and pursuing near-term initiatives to improve the company’s return on invested capital (ROIC) performance.
The latest agreement allows Navistar to continue sourcing components from India while Mahindra would continue to provide engineering services to Navistar. The Navistar group will continue to support M&M through license agreements and extend necessary support to MNAL and MNEPL for the purposes of business continuity.
Mahindra’s future truck plans include the launch of Refrigerated Trucks on the MN25 platform. Mahindra, for its truck business, has 59 dealers and nearly a thousand service points across India.