M&M to pay $463 mn for 70% in Ssangyong

also indicated the possibility of introducing “a premium portfolio of SUVs in the Indian market,providing a new growth avenue for Ssangyong” and further “strengthen its position” in the utility vehicle segment. The definitive agreement also encapsulates terms and conditions related to the process of acquiring new stock and corporate bonds,down payment and deposit guidelines,repayment of rehabilitation claims,employment guarantees,and other covenants. After completing all the acquisition procedures and the repayment of rehabilitation claims,the corporate rehabilitation process is likely to be finished by March 2011.

SYMC is undergoing a corporate rehabilitation process since February 2009 and the court receivership will conclude upon court approval and the termination of corporate rehabilitation process. “Mahindra is committed to nurturing the Ssangyong brand in global markets while preserving its Korean heritage. It is intended that SYMC will continue to function as an independent entity with primarily a Korean management. The acquisition will offer financial stability to SYMC and the two companies will work to further strengthen Ssangyong’s product portfolio across the globe. The inherent strengths of Ssangyong combined with Mahindra’s expertise will help in building a global SUV major,” M&M said.

SM had shortlisted six firms for going ahead with a due diligence process. 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. Ssangyong has a strong domestic network of over 130 dealers and exports to over 90 countries through over 1,200 dealers. In 1988,it developed a compact 4WD SUV,Korando Family,which was the first SUV manufactured in Korea.

Its SUV — Musso — was a great success in Korea and key export markets like Western Europe. In 1997,it launched a luxury passenger car — Chairman. Since then it has launched a number of SUVs and a new luxurious version of the ‘Chairman’ named ‘Chairman W’ in 2008. Its latest SUV,a monocoque compact SUV,named ‘Korando C’ was launched in export markets in October 2010.

“The securing of a solid partner who has both financial capability and is engaged in diverse markets will allow Ssangyong to emerge as a global SUV player through the strengthening of R&D,investments in product development,better business competitiveness and global sales expansion,” said Yooil Lee,joint receiver of SYMC. “We are committed to leverage the combined synergies by investing in a new Ssangyong product portfolio to gain momentum in global markets,” said Pawan Goenka,president,automotive & farm sector,M&M.

The labour union of SYMC,M&M and SYMC have also signed an agreement which contains provisions for employment protection,long-term investment and commitment for no labour dispute.