Mahindra & Mahindra Ltd. and Navistar International Corporation announced today that Mahindra intends to purchase Navistar Group’s stake in Mahindra Navistar Automotives Ltd (MNAL) and Mahindra Navistar Engines Pvt Ltd (MNEPL). Following the purchase worth Rs 175 crore, both MNAL and MNEPL would become wholly owned subsidiaries of Mahindra. Mahindra would take complete ownership of operations and continue to sell MNEPL and MNAL products. The sale requires regulatory approval in India, is subject to the conclusion of definitive agreements, and is expected to be completed in early 2013.
The agreement allows Navistar to continue sourcing components from India while Mahindra would continue to provide engineering services to Navistar. Navistar Group would continue to support M&M through a license agreement and extend necessary support to MNAL and MNEPL for the purposes of business continuity.
“ We acknowledge the contribution made by Navistar to this venture thus far and appreciate their support for business continuity after they exit the business.” said Dr. Pawan Goenka, president, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd.
Troy Clarke, president and chief operating officer, Navistar said “Mahindra has extensive experience and knowledge of the Indian automotive sector and they are best situated to devote the time and resources required to capitalize on future opportunities in India.”