In a significant development for its overseas prospects, Mahindra Two Wheeler (MTW), the unlisted subsidiary of the Mahindra group, has made a binding offer to buy 51 per cent stake in Peugeot Motorcycles (PMTC), a part of the France-based 54-billion euro PSA group.
The transaction, subject to conditions, would involve the infusion of 15 million euro into PMTC to finance projects implemented through the partnership and further share sale by PSA, amounting to 13 million euro, giving MTW a 51 per cent stake in PMTC for 28 million euro (around Rs.215 crore).
Addressing a press conference here, M&M Executive Director Pawan Goenka said the transaction would be completed in three months and, thereafter, the PMTC board would have three directors from MTW and two from PSA.The current management and the CEO will continue. “We did not explore a complete buyout and insisted that they continue to remain invested as an active partner,’’ he said.
PMTC, also known as Peugeot Scooters, is the oldest motorised two-wheeler manufacturer in the world, offering scooters from 50 cc to 400 cc engines. Its plant at Mandeure, France, makes premium scooters and a 50:50 joint venture in China makes mass scooters.
Mr. Goenka said PMTC employed around 300 people in China and 500 in France. “There will be no restructuring for two years after takeover, but Peugeot is independently carrying out some restructuring as part of its stated plan,’’ he added.
Mahindra plans to follow a two-brand strategy.
Rajesh Jejurikar, CEO, Two wheelers, M&M, said Europe accounted for only 4 per cent of global two-wheeler sales and Peugeot had 75 per cent there.
“The focus will be on Europe and India. Vietnam will also be a thrust area given its high acceptance of French brands. We may set up local assembly there and could consider the North African market due to the same reasons,’’ he said. Mr. Goenka said PMTC’s scooters were priced at 1,000-9,000 euro, much more expensive than products in India.
